def14a
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO.)
Filed by the Registrant þ
Filed by a Party other than the Registrant o
Check the appropriate box:
o Preliminary Proxy Statement
þ Definitive Proxy Statement
o Definitive Additional Materials
o Soliciting Material Under Rule 14a-12.
o Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
Bank of Commerce Holdings
(Name of Registrant as Specified in its Charter)
PAYMENT OF FILING FEE (Check the appropriate box): ¨ |
þ |
|
No Fee Required |
|
o |
|
Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. |
|
1) |
|
Title of each class of securities to which the transaction applies: |
|
|
|
|
|
|
|
2) |
|
Aggregate number of securities to which the transaction applies: |
|
|
|
|
|
|
|
3) |
|
Per unit price or other underlying value of the transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined) |
|
|
|
|
|
|
|
4) |
|
Proposed Maximum Aggregate value of the transaction: |
|
|
|
|
|
|
|
5) |
|
Total fee paid: |
|
|
|
|
|
o |
|
Fee paid previously with preliminary materials. |
|
o |
|
Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the fee was
previously paid. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing. |
|
1) |
|
Amount previously paid: |
|
|
|
|
|
|
|
2) |
|
Form, Schedule or Registration Statement No.: |
|
|
|
|
|
|
|
3) |
|
Filing party: |
|
|
|
|
|
|
|
4) |
|
Date Filed: |
|
|
|
|
|
Bank of Commerce Holdings
Notice of 2011 Annual Meeting of Shareholders
And
Proxy Statement
April 08, 2011
Dear Shareholder:
It is my pleasure to invite you to Bank of Commerce Holdings 2011 Annual Meeting of Shareholders.
We will hold the meeting on May 17, 2011, at 5:15 p.m., in the lobby of Bank of Commerce located at
1951 Churn Creek Road, Redding, California, 96002. In addition to the formal items of business, I
will report on past performance and future prospects.
At the annual meeting you will be asked to elect the slate of directors, to ratify the appointment
of independent accountants for 2010, and to make a non-binding vote approving executive
compensation. The Board of Directors recommends that you vote FOR the director nominees, FOR
ratification of independent accountants, and FOR the non-binding resolution approving executive
compensation.
This mailing includes the formal notice of the Annual Meeting and the Proxy Statement. The Proxy
Statement describes the business that we will conduct at the meeting and our 2010 Form 10-K and
Annual Report provides financial results and information about Bank of Commerce Holdings and its
subsidiaries.
Please vote promptly by mail, telephone or internet regardless of whether you plan to attend the
meeting. You may later decide to vote in person at the meeting if you are a stockholder of record,
or you may revoke your proxy or voting instructions for any other reason before your shares are
voted. Your vote is important.
We look forward to seeing you at the meeting.
Sincerely,
|
|
|
|
|
|
|
|
|
/s/ Patrick J. Moty
|
|
|
Patrick J. Moty |
|
|
President and
Chief Executive Officer
Bank of Commerce Holdings & Subsidiaries |
|
|
This proxy statement and the accompanying form of proxy are being mailed to shareholders on or
about April 08, 2011
Bank of Commerce Holdings
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
|
|
|
Date:
|
|
Tuesday, May 17, 2011 |
Time:
|
|
5:15 p.m. |
Place:
|
|
Bank of Commerce Redding |
|
|
1951 Churn Creek Road |
|
|
Redding, California 96002 |
Dear Shareholders:
At our 2011 Annual Meeting, we will ask you to:
|
|
Elect ten directors each to serve for a term of one year; |
|
|
|
Ratify the selection of Moss Adams, LLP as our independent public accountants for 2010; |
|
|
|
Adopt a non-binding advisory resolution approving executive compensation; and |
|
|
|
Transact any other business that may properly be presented at the Annual Meeting. |
If you were a shareholder of record as of the close of business on March 15, 2011, you
are entitled to notice of and to vote at the Annual Meeting and any adjournment thereof.
This proxy statement and the accompanying form of proxy are being mailed to shareholders
on or about April 8, 2011.
|
|
Whether or not you plan to attend, please grant a proxy to vote your
shares in one of three ways: via telephone, facsimile or mail.
Instructions regarding telephone voting are included on the proxy card.
If you choose to vote by mail, please mark, sign and date the proxy card
and return it in the enclosed envelope. Your proxy may be revoked at any
time before it is exercised as explained in the proxy statement. Our
transfer agents facsimile number is (908) 272-6835. Returning your
proxy will not limit your rights to attend or vote at the Annual
Meeting. |
By Order of the Board of Directors,
|
|
|
|
|
|
|
|
|
/s/ David H. Scott
|
|
|
David H. Scott |
|
|
Corporate Secretary, Bank of Commerce Holdings |
|
|
|
|
|
|
|
|
Redding, California
|
|
Dated: April 8, 2011 |
Page 1
Bank of Commerce Holdings
TABLE OF CONTENTS
|
|
|
|
|
Information
about the Annual Meeting and voting |
|
|
|
|
|
|
|
4 |
|
|
|
|
4 |
|
|
|
|
4 |
|
|
|
|
4 |
|
|
|
|
4 |
|
|
|
|
5 |
|
|
|
|
5 |
|
|
|
|
5 |
|
|
|
|
5 |
|
|
|
|
5 |
|
|
|
|
5 |
|
|
|
|
6 |
|
|
|
|
6 |
|
Information
about Bank of Commerce Holdings Stock Ownership |
|
|
|
|
|
|
|
9 |
|
|
|
|
10,11 |
|
|
|
|
11 |
|
|
|
|
12 |
|
|
|
|
12 |
|
|
|
|
13 |
|
|
|
|
15 |
|
|
|
|
16 |
|
|
|
|
16 |
|
|
|
|
17 |
|
|
|
|
17 |
|
|
|
|
18 |
|
|
|
|
18 |
|
|
|
|
18 |
|
|
|
|
18 |
|
|
|
|
18 |
|
|
|
|
18 |
|
|
|
|
19 |
|
|
|
|
19 |
|
|
|
|
19 |
|
|
|
|
20 |
|
|
|
|
22 |
|
|
|
|
22 |
|
|
|
|
|
|
|
|
|
23 |
|
|
|
|
24 |
|
|
|
|
24 |
|
|
|
|
24 |
|
|
|
|
25 |
|
Page 2
|
|
|
|
|
|
|
|
25 |
|
|
|
|
26 |
|
|
|
|
26 |
|
|
|
|
27 |
|
|
|
|
27 |
|
|
|
|
27 |
|
|
|
|
27 |
|
|
|
|
28 |
|
|
|
|
28 |
|
|
|
|
28 |
|
|
|
|
28 |
|
|
|
|
29 |
|
|
|
|
30 |
|
|
|
|
30 |
|
|
|
|
31 |
|
|
|
|
32 |
|
|
|
|
33 |
|
|
|
|
33 |
|
|
|
|
34 |
|
|
|
|
35 |
|
|
|
|
35 |
|
|
|
|
35 |
|
|
|
|
36 |
|
|
|
|
36 |
|
|
|
|
36 |
|
|
|
|
37 |
|
|
|
|
39 |
|
|
|
|
42 |
|
|
|
|
42 |
|
|
|
|
42 |
|
|
|
|
42 |
|
|
|
|
43 |
|
|
|
|
43 |
|
|
|
|
45 |
|
|
|
|
50 |
|
|
|
|
52 |
|
Page 3
Why did you send me this Proxy Statement?
The Board of Directors of Bank of Commerce Holdings is soliciting proxies from its stockholders to
be used at the annual meeting of stockholders on Tuesday, May 17, 2011. This Proxy Statement
summarizes the information you need to know to cast an informed vote at the Annual Meeting. You do
not need to attend the Annual Meeting to vote your shares. Instead you may simply complete, sign
and return the enclosed proxy card, or use the convenient telephone or internet voting method as
described in the proxy card.
Along with this Proxy Statement, we are also sending you our 2010 Annual Report on Form 10-K (Form
10-K) and Annual Report. .
Who is entitled to vote?
Shareholders of record at the close of business on March 15, 2011 (the Record Date) are entitled
to notice of and to vote at the Annual Meeting. As of the close of business on the Record Date,
the Company had 16,991,495 shares of Common Stock outstanding and entitled to vote.
What constitutes a quorum?
The presence in person or by proxy of the holders of a majority of the Companys outstanding shares
of Common Stock (Common Stock) constitutes a quorum for the transaction of business at the Annual
Meeting. Abstentions and broker non-votes are each included in the determination of the number
of shares present and voting for purposes of determining the presence of a quorum. A broker
non-vote occurs when the nominee holding shares for a beneficial owner does not have
discretionary voting power with respect to that item and has not received instructions from the
beneficial owner. Abstentions and broker non-votes will be included in the tabulations of the
votes cast on proposals presented to the shareholders and therefore will have the effect of a
negative vote.
How many votes do I have?
Each share of Bank of Commerce Holdings Common Stock that you owned as of the record date entitles
you to one vote. The proxy card indicates the number of votes that you have.
How do I vote by proxy? Can I vote by telephone or internet?
Whether or not you plan to attend the Annual Meeting, we urge you to complete, sign and date the
enclosed proxy card and to return it promptly. You may also cast your vote by telephone or internet
as indicated on the proxy card. Returning the proxy card will not affect your right to attend the
Annual Meeting and vote. If you fill in your proxy card and send it to us in time to vote, your
proxy (as appointed on your proxy card) will vote your shares as you have directed. If you sign
the proxy card but do not make specific choices, your proxy will vote your shares as recommended by
the Board of Directors as follows:
For the election of all nominees for Director
For the ratification of independent accountants
For the non-binding resolution approving executive compensation
If any other matter is presented, your proxy will vote in accordance with the recommendation of the
Board of Directors, or, if no recommendation is given, in accordance with his or her best judgment.
At the time this Proxy Statement went to press, we knew of no matters that needed to be acted upon
at the Annual Meeting, other than those discussed in this Proxy Statement.
Page 4
How do I change my vote?
Only holders of record at the close of business on March 15, 2011 will be entitled to vote at the
annual meeting. Whether or not you plan to attend the Annual Meeting, you may vote your shares via
mail, telephone or internet. If you fill out and vote the proxy card, you may change your vote at
any time before the vote is conducted at the Annual Meeting. You may notify the Companys Corporate
Secretary in writing before the Annual Meeting that you have revoked your proxy. You may also
attend the Annual Meeting and vote in person.
What vote is required to approve each proposal?
Proposal 1: Elect the slate of directors
It is very important that you vote for the director seats.
Your broker cannot vote on this item for you.
The nominees for director who receive the most votes will be elected. If you do not vote
for a particular nominee, or you indicate Withhold Authority to vote for a particular nominee on
your proxy card, your vote will not count for or against the nominee.
Proposal 2: Ratify the selection of Independent Public Accountants
The affirmative vote of a majority of votes cast at the Annual Meeting on this proposal is required
to ratify the selection of independent public accountants. If you abstain from voting, it has no
effect on the outcome of this proposal.
Proposal 3: Advisory resolution on Executive Compensation
The affirmative vote of a majority of votes cast at the Annual Meeting on this proposal is required
to ratify the non-binding advisory resolution approving executive compensation. If you abstain
from voting, it has no effect on the outcome of this proposal.
What are the costs of soliciting these Proxies?
The expense of printing and mailing proxy materials, including the Form 10-K and the Annual Report,
will be borne by the Company. In addition to the solicitation of proxies by mail, certain
directors, officers and other employees of the Company solicit proxies by personal interview,
telephone or facsimile. No additional compensation will be paid to such persons for such
solicitation. The Company will reimburse brokerage firms and others for their reasonable expenses
in forwarding solicitation materials to beneficial owners of the Companys Common Stock. We have
contracted with Registrar and Transfer and Broadridge Services to assist us in the distribution of
materials and tabulation of the results. This service will cost the Company approximately $65,000,
plus out of pocket expenses.
Page 5
How do I obtain an Annual Report on Form 10-K?
The consolidated financial statements of Bank of Commerce Holdings and its subsidiaries for the
year ended December 31, 2010, are part of the Companys Form 10-K which accompanies this proxy
statement.
Additional copies of the annual report on Form 10-K and 2010 Annual Report may be obtained upon
written request to Samuel D. Jimenez, Senior Vice President & Chief Financial Officer at the
Companys administrative offices, 1901 Churn Creek Road, Redding, California 96002.
The Securities and Exchange Commission (SEC) maintains an internet site at
http://www.sec.gov that contains Bank of Commerce Holdings SEC filings. Access to the
filings are also available from Bank of Commerces website under the heading Investor
Information. The website address is www.bankofcommerceholdings.com.
How has issuing securities to the U.S. Treasury affected the voting at the Annual Meeting?
On November 14, 2008, as part of the Capital Purchase Program (the Capital Purchase Program)
under the Troubled Asset Relief Program (TARP) of the United States Department of the Treasury
(U.S. Treasury), the Company entered into a Letter Agreement with the U.S. Treasury pursuant to
which the Company sold 17,000 shares of Preferred Stock to the U.S. Treasury, along with a warrant
to purchase 405,405 shares of Common Stock (the Warrant Shares) at an initial exercise price of
$6.29 per share. The U.S. Treasury currently owns all issued and outstanding Preferred Stock of the
Company. Subject to the terms of the Certificate of Designations of the Preferred Stock, the
Preferred Stock is non-voting except for class voting rights on matters that would adversely affect
the rights of the holders of the Preferred Stock. The U.S. Treasury does not have any voting
rights with respect to the Warrant Shares.
Pursuant to the terms of the preferred stock issued to the U.S. Treasury, on the occurrence of
certain events, the U.S. Treasury would be provided the authority to appoint two members of the
Board of Directors (contingent directors). Descriptions herein relating to the qualification,
nomination, and election of directors do not include contingent directors.
In connection with its participation in the Capital Purchase Program, the Company is required under
current regulations, for the duration of the period that the U.S. Treasury holds any equity or debt
position in the Company acquired under the Capital Purchase Program, to take the following actions
with respect to its executive compensation arrangements relating to its Senior Executive Officers
(the SEOs):
|
|
|
require that SEO bonus and incentive compensation are subject to
recovery or claw-back by the Company if the payments were based on
materially inaccurate financial statements or any other materially
inaccurate performance metric criteria; |
|
|
|
|
prohibit any golden parachute payment to the SEOs,
generally meaning any payment in the nature of compensation
to (or for the benefit of) an SEO made in connection with
an applicable severance from employment to the extent the
aggregate present value of such payments equals or exceeds
an amount equal to three times the SEOs base amount
(generally defined as the five-year average of the
executives compensation); and |
|
|
|
|
agree that it will be subject to Section 162(m)(5) of the Internal
Revenue Code (the Code), which reduces the annual tax deduction
limit for remuneration paid to the SEOs during any taxable year from
$1,000,000 to $500,000 and eliminates the availability of the
exception to the deduction limit for performance-based compensation,
as defined in the Code. |
Page 6
The Companys SEOs currently consist of the same executive officers who are designated named
executive officers for purposes of this Proxy Statement.
In addition, in connection with its participation in the Capital Purchase Program, the Compensation
Committee is required to meet every six months with the Companys Chief Risk Officer or other
senior risk officers to discuss and review the relationship between the Companys risk management
policies and practices and its SEO incentive compensation arrangements, identifying and making
reasonable efforts to limit any features in such compensation arrangements that might lead to the
SEOs taking unnecessary or excessive risks that could threaten the value of the Company. The
Compensation Committee, on behalf of the Company, must certify that it has completed the review and
taken any necessary actions.
In response to this requirement, on November 16, 2010 the Compensation Committee met with Robert
Oberg, who has been identified by the Board as acting as the Companys Chief Risk Officer. The
Chief Risk Officer presented the Compensation Committee with an overview of the Companys overall
risk structure and the top risks identified within the Company, and discussed the process by which
he had analyzed the risks associated with the executive compensation program. This process
included, among other things, a comprehensive review of the program and discussions with senior
Human Resources personnel of the Company. The Compensation Committee reviewed with the Chief Risk
Officer the structure of the Companys overall executive compensation program. This review
included, without limitation, the upside and downside compensation potential under the Companys
annual incentive plans; the long-term view encouraged by the design and vesting features of the
Companys long-term incentive arrangements; and the extent to which the Compensation Committee and
the Companys management monitor the program. Based on its analysis of these and other factors, the
Compensation Committee determined that the Companys executive compensation program does not
encourage the SEOs to take unnecessary and excessive risks that threaten the value of the Company,
and that no changes to the program were required for this purpose. The required certification of
the Compensation Committee is provided in the Compensation and Human Resources Committee Report set
forth following the Compensation Discussion and Analysis in this proxy statement.
On February 17, 2009, President Barack Obama signed the American Relief and Recovery Act
(ARRA) into law. The ARRA includes provisions directing the Secretary of the U.S. Treasury and
the SEC to impose additional limits on compensation of executives of companies that participate in
the Capital Purchase Program as long as the U.S. Treasury owns preferred stock and/or stock
purchase warrants of such companies under the Capital Purchase Program. These provisions include,
among others:
|
|
|
a prohibition on golden parachute payments to any SEO or any of the
next five most highly compensated employees of the participating
company; |
|
|
|
|
a prohibition on paying or accruing any bonus, retention award, or
incentive compensation to the SEOs and the twenty next most highly
compensated employees that fully vests during the period in which any
obligation under the Capital Purchase Program remains outstanding or
that has a value greater than one-third of the total amount of the
annual compensation of the employee receiving the award; and |
|
|
|
|
An annual, non-binding shareholder vote on the companys executive compensation program. |
In accordance with the ARRA and based on recent guidance issued by the SEC, the Board of Directors
authorized a non-binding advisory shareholder vote on the Companys executive compensation plans,
programs and arrangements. See Proposal 4: Advisory Vote on Executive Compensation.
Page 7
Other provisions of the ARRA require the participating companies to establish a board compensation
committee that must meet at least semi-annually to discuss and evaluate employee compensation plans
in light of an assessment of any risk posed to the company from such plans; to adopt a company-wide
policy regarding excessive or luxury expenditures; and to annually file a written certification
of the companys CEO and CFO as to the companys compliance with the requirements.
As required by the ARRA and the guidance provided by the SEC, the Board of Directors has authorized
a shareholder vote on the Companys executive compensation plans, programs and arrangements as
reflected in the Compensation Discussion and Analysis, the disclosures regarding named executive
officer compensation provided in the various tables included in this Proxy Statement, the
accompanying narrative disclosures and the other compensation information provided in this Proxy
Statement.
Shareholders are encouraged to carefully review the Executive Compensation section of this Proxy
Statement for a detailed discussion of the Companys executive compensation program.
Interests of directors, nominees and executive officers in matters to be voted upon.
No directors, nominees, or executive officers of the Company have personal interest in the matters
to be voted upon in this election. The vote respecting approval of executive compensation is
non-binding, and a vote denying approval would not directly affect executive compensation, but
would be considered in future compensation decisions by the Board and the Executive Compensation
Committee.
Page 8
VOTING SECURITIES AND OWNERSHIP OF CERTAIN BENEFICIAL HOLDERS
Bank of Commerce Holdings is not aware of any individual shareholders who beneficially own 5% or
more of our outstanding common stock. The Company is aware of three entities that own 5% or more
of our outstanding common stock. The Securities and Exchange Commission has defined beneficial
ownership (1) to mean more than ownership in the usual sense. For example, a person has beneficial
ownership of a share not only if he owns it in the usual sense, but also if he has the power to
vote, sells or otherwise disposes of the share. Beneficial ownership also includes that number of
shares that a person has a right to acquire within sixty (60) days.
The following table shows:
|
|
|
each person or entity who is known by the Company to beneficially own more than five
percent of the Companys common stock, |
|
|
|
|
each of the Companys directors and nominees, |
|
|
|
|
each of the named executive officers, and |
|
|
|
|
All directors and executive officers of the Company as a group. |
Unless otherwise noted below, the address of each beneficial owner listed on the tables is c/o Bank
of Commerce Holdings, 1901 Churn Creek Road, Redding, California 96002. We have determined
beneficial ownership in accordance with the rules of the Securities and Exchange Commission. Except
as indicated by the footnotes below, we believe, based on the information furnished to us, that the
persons and entities named in the tables below have sole voting and investment power with respect
to all shares of common stock that they beneficially own, subject to applicable community property
laws. We have based our calculation of the percentage of beneficial ownership on 16,991,495 shares
of common stock outstanding on March 15, 2011.
Holders of Common Stock are entitled to one vote for each share held except that for the election
of directors each shareholder has cumulative voting rights and is entitled to as many votes as
shall equal the number of shares held by such shareholder multiplied by the number of directors to
be elected and such shareholder may cast all his or her votes for a single candidate or distribute
such votes among any or all of the candidates as he or she chooses. However, no shareholder shall
be entitled to cumulate votes (in other words, cast for any candidate a number of votes greater
than the number of shares of stock held by such shareholder) unless such candidates names have
been placed in nomination prior to the voting and the shareholder has given notice at the Meeting
prior to the voting of the shareholders intention to cumulate votes. If any shareholder has given
such notice, all shareholders may cumulate their votes for candidates in nomination. An
opportunity will be given at the Meeting prior to the voting for any shareholder who desires to do
so, to announce his or her intention to cumulate his or her votes. In computing the number of
shares of common stock beneficially owned by person and the percentage ownership of that person, we
deemed outstanding shares of common stock subject to options held by that person that are currently
exercisable or exercisable within 60 days of March 15, 2011. We did not deem these shares
outstanding, however, for the purpose of computing the percentage ownership of any other person.
|
|
|
|
|
|
|
|
|
|
|
Number of Shares of Common |
|
Percentage |
Name and Address of Beneficial Owner |
|
Stock Beneficially Owned |
|
of Class |
Wellington Management Co. LLP
|
|
|
1,525,237 |
|
|
|
8.98 |
% |
75 State Street
Boston, MA 02109 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Jacobs Asset Management LLC
|
|
|
1,271,940 |
|
|
|
7.49 |
% |
One Fifth Avenue
New York, NY 10003 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bank Funds Co. LLC |
|
|
900,000 |
|
|
|
5.30 |
% |
20 North Wacker Drive
Chicago, IL 60606 |
|
|
|
|
|
|
|
|
Page 9
|
|
|
|
|
|
|
|
|
|
|
Number of Shares of Common |
|
Percentage |
Name and Address of Beneficial Owner |
|
Stock Beneficially Owned |
|
of Class |
Kenneth R. Gifford, Jr. (1) |
|
|
381,560 |
|
|
|
2.26 |
% |
Patrick J. Moty (2) |
|
|
199,524 |
|
|
|
1.18 |
% |
Lyle L. Tullis (3) |
|
|
163,620 |
|
|
|
0.97 |
% |
Russell L. Duclos (4) |
|
|
154,705 |
|
|
|
0.91 |
% |
David H. Scott (5) |
|
|
101,255 |
|
|
|
0.60 |
% |
Orin Bennett (6) |
|
|
62,564 |
|
|
|
0.37 |
% |
Jon Halfhide (7) |
|
|
41,640 |
|
|
|
0.25 |
% |
Linda J. Miles (8) |
|
|
37,750 |
|
|
|
0.22 |
% |
Randall S. Eslick (9) |
|
|
28,511 |
|
|
|
0.17 |
% |
Joe Gibson (10) |
|
|
19,205 |
|
|
|
0.11 |
% |
Ted Cumming (11) |
|
|
15,150 |
|
|
|
0.09 |
% |
Sam Jimenez (12) |
|
|
12,200 |
|
|
|
0.07 |
% |
Gary Burks (13) |
|
|
6,672 |
|
|
|
0.04 |
% |
Robert C. Oberg (14) |
|
|
3,732 |
|
|
|
0.02 |
% |
|
|
|
|
|
|
|
|
|
All directors, executive
officers and beneficial owners as a
group (13 persons) |
|
|
1,228,088 |
|
|
|
7.26 |
% |
|
|
|
(1) |
|
Includes 284,760 shares held jointly with Mr. Giffords spouse, 19,800 shares held by
Gifford Construction, Inc., 39,000 held individually in Mr. Giffords IRA and 38,000 shares
held individually in Sally Giffords (Mr. Giffords spouse) IRA account. |
|
(2) |
|
Includes 61,000 shares jointly with Mr. Motys spouse, 105,224 shares in the Bank of
Commerce 401(k) Plan to which Mr. Moty has voting powers as Trustee and 33,300 shares issuable
to Mr. Moty upon the exercise of options exercisable within 60 days of March 22, 2011. |
|
(3) |
|
Includes 155,583 shares held jointly with Mr. Tullis spouse and 7,000 shares held
separately in his spouses name and 1,037 shares issuable to Mr. Tullis upon the exercise of
options exercisable within 60 days of March 22, 2011. |
|
(4) |
|
Includes 150,000 shares held by the Duclos Family Trust of which Mr. Duclos and his spouse
are co-trustees and 4,705 held individually by Mr. Duclos. |
|
(5) |
|
Includes 76,991 shares held jointly with Mr. Scotts spouse, 204 shares held
individually by his spouse, 7,241 shares in the Companys 401(k) retirement plan, 16,819 shares
in his spouses individual retirement account. Mr. Scott and his spouse pledged 76,041 shares
of the Companys Common Stock to Umpqua Bank to secure a loan. |
|
(6) |
|
Includes 1,500 shares held jointly with Mr. Bennetts spouse, 48,264 shares held by the
Bennett Family Revocable Trust and 12,800 shares issuable to Mr. Bennett upon the exercise of
options exercisable within 60 days of March 22, 2011. |
|
(7) |
|
Includes 30,900 shares held by the Halfhide Family Trust of which Mr. Halfhide is
co-trustee with his spouse Teresa, 500 shares held jointly with his spouse, and 10,240 shares
issuable to Mr. Halfhide upon the exercise of options exercisable within 60 days of March 22,
2011. |
|
(8) |
|
Includes 19,750 shares held by the Miles Family Trust of which Mrs. Miles and her spouse
are co-trustees, and 18,000 shares issuable to Ms. Miles upon the exercise of options
exercisable within 60 days of March 22, 2011. |
|
(9) |
|
Includes 7,461 shares held individually in an IRA account and 21,050 shares issuable to Mr.
Eslick upon the exercise of options exercisable within 60 days of March 22, 2011. |
|
(10) |
|
Includes 19,205 shares held individually by Mr. Gibson. |
|
(11) |
|
Includes 15,150 shares issuable to Mr. Cumming upon the exercise of options
exercisable within 60 days of March 22, 2011. |
|
(12) |
|
Includes 4,000 shares held jointly with Mr. Jimenezs spouse and 8,200 shares
issuable to Mr. Jimenez upon the exercise of options exercisable within 60 days of March 22,
2011. |
|
(13) |
|
Includes 6,672 shares held jointly by Mr. Burks and his spouse Ramona. |
|
(14) |
|
Includes 2,132 shares held individually in an IRA account and 1,600 shares issuable to Mr.
Oberg upon the exercise of options exercisable within 60 days of March 22, 2011. |
Page 10
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934, as amended (Exchange Act), requires the
Companys directors and executive officers and persons who own more than ten percent of a
registered class of the Companys equity securities to file with the SEC initial reports of
ownership and reports of changes of ownership of Common Stock and other equity securities of the
Company. To the Companys knowledge, based solely upon a review of such reports and written
representations, the Company believes that all reports required by Section 16(a) of the Exchange
Act to be filed by its executive officers and directors during the last fiscal year were filed in a
timely manner.
Page 11
INFORMATION ABOUT DIRECTORS AND EXECUTIVE OFFICERS
Executive Officers of the Company
The named executive officers of the Company and their ages as of December 31, 2010, are as follows:
|
|
|
|
|
|
|
Name |
|
Age |
|
Position(s) |
Patrick J. Moty
|
|
|
53 |
|
|
President, Chief Executive Officer and Director
Bank of Commerce Holdings
and Redding Bank of Commerce |
Linda J. Miles
|
|
|
57 |
|
|
Executive Vice President and Chief Operating Officer |
Samuel D. Jimenez
|
|
|
46 |
|
|
Senior Vice President and Chief Financial Officer |
Robert Oberg
|
|
|
50 |
|
|
Senior Vice President and Chief Risk Officer |
Theodore Cumming
|
|
|
53 |
|
|
Senior Vice President & Chief Credit Officer |
Randall S. Eslick
|
|
|
53 |
|
|
Regional President Roseville Division |
Patrick J. Moty was born in 1957 and has been with the Company since 1985. Mr. Moty has served
as President and Chief Executive Officer of the Company since his election in September 2007. Prior
to becoming CEO, he served as Executive Vice President and Chief Credit Officer of the Company
beginning in December 2005; as Senior Vice President and Chief Credit Officer of the Company
beginning in 2000; as Senior Vice President and Senior Loan Officer beginning in 1998; as Vice
President and Senior Loan Officer beginning in 1993; as Vice President and Loan Officer beginning
in 1988; as Assistant Vice President and Loan Officer beginning in 1987; and as Loan Officer
beginning in 1985. Prior to joining the Company in 1985, Mr. Moty spent four years in lending at a
large regional financial institution. Mr. Moty has served as a director of Bank of Commerce
Mortgage since 2009 and Bank of Commerce Holdings since 2007.
Linda J. Miles was born in 1953 and has been the Executive Vice President and Chief Operating
Officer of Bank of Commerce Holdings, Redding Bank of Commerce and Bank of Commerce Mortgage since
May 2009. From October 1989 to May 2009, she served as Executive Vice President and Chief Financial
Officer of the Company. Before joining the Company, Ms. Miles was Senior Vice President and Chief
Financial Officer at another California independent financial institution. Ms. Miles has served as
a director of Bank of Commerce Mortgage since 2009.
Samuel D. Jimenez was born in 1964 and has been Senior Vice President and Chief Financial Officer
and Principal Accounting Officer since May 1, 2009. Prior to becoming CFO, he served beginning in
September 2003 as Senior Vice President and Director of Risk Management of Redding Bank of
Commerce. Prior to that, he was a Federal Deposit Insurance Examiner from 1992 2003. Mr. Jimenez
is a Certified Public Accountant.
Robert Oberg was born in 1960 and has been a Senior Vice President and Chief Risk Officer since
March 2009. Mr. Oberg began his banking career in 1984 with the Office of the Comptroller of the Currency and
has over twenty years of COSO and Basel risk management experience. Mr. Oberg is responsible for
the identification, assessment, and management of risk throughout the organization. Mr. Oberg is
also responsible for risk quantification and modeling, and oversees the banks Compliance, Audit,
Loan Review, Fraud, and BSA functions.
Theodore Cumming was born in 1957 and has been Senior Vice President & Chief Credit Officer since
October 2007. From 2001 until October 2007, Mr. Cumming served as Senior Vice President and Lending
Group Manager of Redding Bank of Commerce Placer Division. Prior to joining the company Mr. Cumming
served as Vice President of Commercial Lending for a large regional bank.
Page 12
Randall S. Eslick was born in 1957 and has been Regional President of Roseville Bank of Commerce
since December 2005. From 2002 until December 2005, Mr. Eslick served as Senior Vice President and
Regional Manager of the Roseville Bank of Commerce. Prior to joining the company, Mr. Eslick served as Vice
President and Commercial Loan Officer at another California independent financial institution. Mr.
Eslick joined the Company in March 2001 as Senior Vice President and Commercial Loan Officer.
Directors of the Company
The directors of the Company and their ages as of December 31, 2010, are as follows:
|
|
|
|
|
|
|
|
|
Name |
|
Age |
|
Positions Held |
|
Term |
|
Served Since |
Orin N. Bennett |
|
62 |
|
Director |
|
1 year |
|
2005 |
Gary Burks |
|
56 |
|
Director |
|
1 year |
|
2007 |
Russell L. Duclos |
|
71 |
|
Director |
|
1 year |
|
1997 |
Joseph Gibson |
|
63 |
|
Director |
|
1 year |
|
2009 |
Kenneth Gifford, Jr. |
|
65 |
|
Chairman, Director |
|
1 year |
|
1998 |
Jon Halfhide |
|
53 |
|
Director |
|
1 year |
|
2005 |
Patrick J. Moty |
|
53 |
|
Director |
|
1 year |
|
2007 |
David H. Scott, CPA |
|
66 |
|
Director |
|
1 year |
|
1997 |
Lyle L. Tullis |
|
60 |
|
Director |
|
1 year |
|
2003 |
Orin N. Bennett was born in September 1948 and has been a director of Redding Bank of Commerce
since September 2005, and a director of the Company since May 2006.
Business Experience: Mr. Bennett is a registered Civil Engineer in California and Oregon. He owns
Bennett Engineering Services in Roseville, California which provides engineering services to
cities, counties and special districts primarily in Northern California and began on January 1,
2008. Mr. Bennett owns Bennett West Roseville LLC. He is also a partner in BD Properties and
Portola 192 LLC, both real estate investment companies. Mr. Bennett was previously employed by the
international engineering firm of CH2M Hill prior to forming his own business.
Other Public Company Directorships: None.
Committees: Mr. Bennett serves on the Loan, Executive, Nominating and Corporate Governance,
Executive Compensation and Long-Range Planning committees of the Board of Directors.
Gary Burks was born in December 1954 and has been a director of Redding Bank of Commerce since June
2007, and a director of the Company since May 2008.
Business Experience: Mr. Burks is Vice President and General Manager of Foothill Distributing
Company, Inc. in Redding since October 1991. He has nineteen years of experience on the board of
Foothill Distributing Company, Inc. a private firm.
Other Public Company Directorships: None.
Committees: Mr. Burks serves on the Audit and Qualified Legal Compliance, Executive Compensation
and Long-Range Planning committees of the Board of Directors.
Page 13
Russell L. Duclos was born in April 1939 and has served as a director of the Company since July
1997.
Business Experience: Mr. Duclos has served as the founding Chief Credit Officer of the Company from
1982 through 1997. From July 1997 through December 2000 he served as President and Chief Executive
Officer of the Company and the Bank. From January 2001 through April 2001 he served as President
and Chief Executive Officer of the Company. He has served on multiple private and non-profit boards
throughout Northern California.
Other Public Company Directorships: Mr. Duclos has served as a director of Bank of Commerce
Mortgage since June 2009.
Committees: Mr. Duclos prior banking experience qualifies him as an expert and he serves as
Chairman of both the Asset Liability Management Committee (ALCO), the Loan Committee. Mr. Duclos
presently serves on the Audit & Qualified Legal Compliance and Long-Range Planning committees of
the Board of Directors.
Joseph Gibson was born in September 1947 and has been a director of Redding Bank of Commerce since
November 2009.
Business Experience: Mr. Gibson has thirty-six years of experience in business management. He was a
teacher and administrator for Anderson Union High School from 1973-2003, and has been an owner of
SFI Insurance, Inc. since 1992. He currently serves on the Anderson Union High School Board, Shasta
College Foundation Board, Past President of Riverview Golf and Country Club and was president of the Anderson Rotary
from 2002-2003.
Other Public Company Directorships: Anderson Union High School, YMCA.
Committees:
Mr. Gibson presently serves on the ALCO committee.
Kenneth R. Gifford, Jr. was born in December 1945 and has served as a director of the Company since
January 1998.
Business Experience: Mr. Gifford serves as the Chairman of the Board of Directors. Mr. Gifford has
been a director and the President and Chief Executive Officer of Gifford Construction, Inc., since
April 1972. Mr. Gifford also serves as a director for the non-profit Shasta County Economic
Development Corporation.
Other Public Company Directorships: None
Committees: Mr. Gifford is a member of the Executive, Executive Compensation, Loan, Nominating and
Corporate Governance, ALCO and Long-Range Planning committees of the Board of Directors.
Jon Halfhide, CPA was born in September 1957 and has been a director of the Company since May 2006.
Business Experience: Since January 2000, he has served as president of Catholic Healthcare West
North State Service Area (Catholic Healthcare West) and St. Elizabeth Community Hospital. He has
over twenty years of management experience with Catholic Healthcare West and has served in the
capacity of Controller and Chief Financial Officer. Mr. Halfhide is a certified public accountant.
Mr. Halfhide also serves on the non-profit board of directors of Mercy Foundation North and
Catholic Healthcare West North State and the non-profit board of directors of the Tehama County
Economic Development Corporation.
Other Public Company Directorships: None.
Committees: Mr. Halfhide meets the criteria to serve as financial expert on the Audit and Qualified
Legal Compliance Committee. Mr. Halfhide serves as Chairman of the Executive Compensation Committee
and serves on the Audit and Qualified Legal Compliance, Nominating and Corporate Governance and
Long-Range Planning committees of the Board of Directors.
Patrick J. Moty has served as a director of the Company since October 2007 and as a director of
Bank of Commerce Mortgage since June 2009. Mr. Moty has served as President and Chief Executive
Officer of the Company since his election in September 2007. His biographical information is set
out above with that of other Executive Officers. Mr. Moty also serves as a member of the board of
directors of the non-profit Shasta County Economic Development Corporation.
Page 14
Other Public Company Directorships: Mr. Moty has served as a director of Bank of Commerce Mortgage
since 2009 and Bank of Commerce Holdings since 2007.
Committees: Mr. Moty serves on the Loan, ALCO, and Long-Range Planning committees of the Board of
Directors.
David H. Scott, CPA was born in March 1944 and has been a director of the Company since April 1997.
Business Experience: He is a partner of D. H. Scott & Company, LLP, a public accounting firm, a
position he has held since June 1986. He also serves on the non-profit Shasta County
Economic Development Corporation.
Other Public Company Directorships: None.
Committees: Mr. Scott serves as Chairman of the Audit and Qualified Legal Compliance Committee and
is a member of the Executive, ALCO, Loan and Long-Range Planning committees of the Board of
Directors. The Board of Directors has determined that Mr. Scott meets the criteria to serve as
financial expert on the Audit Committee. Mr. Scott also serves as the Corporate Secretary of the
Company.
Lyle L. Tullis was born in March 1950 and has been a director of the Company since May 2003.
Business Experience: Since February 1976, he has served as president of Tullis Inc. a general
engineering construction company. His company specializes in public works projects that include
grading and paving. Mr. Tullis is the past District Chairman of the Eureka and Shasta Districts of
the Associated General Contractors of California.
Other Public Company Directorships: None.
Committees: Mr. Tullis serves as Chairman of the Nominating and Corporate Governance committees,
and is a member of the Executive, Audit & Qualified Legal Compliance and Long-Range Planning
committees of the Board of Directors.
Involvement in Certain Legal Proceedings
No legal proceedings involving executive officers or directors of the company for the last ten
years have had any judicial or administrative proceedings resulting from involvement in mail or
wire fraud or fraud in connection with any business entity; any judicial or administrative
proceedings based on violations of Federal or State securities, commodities, banking or insurance
laws and regulations, or any settlement to such actions; and any disciplinary sanctions or orders
imposed by a stock, commodities or derivatives exchange or other self-regulatory organization.
Page 15
THE BOARD, BOARD COMMITTEES AND GOVERNANCE MATTERS
The Board of Directors is committed to sound and effective corporate governance principles and
practices. The Board of Directors has adopted corporate governance guidelines to provide the
framework for the governance of the company. These guidelines set forth director qualifications and
standards of independence, and mandate that at least a majority of the Board and all the members of
the Audit and the Nominating and Corporate Governance Committees meet the criteria for independence
as discussed below. Highlights of our corporate governance practices are described below. To
fulfill its role the Board, acting directly or through a Board Committee must perform the following
primary functions:
|
|
Oversee the conduct of the Companys business to evaluate whether the Company is being
properly managed; |
|
|
|
Review and, where appropriate, approve the Companys major financial objectives, strategic
plans and actions; |
|
|
|
Review and, where appropriate, approve major changes in, and determinations of other major
issues respecting the appropriate auditing and accounting principles and practices to be used
in the preparation of the companys financial statements; |
|
|
|
Assess major risk factors relating to the Company and its performance, and review measures
to address and mitigate such risks; |
|
|
|
Evaluate regularly the performance and approve the compensation of the CEO and, with the
advice of the CEO, evaluate regularly the performance of principal senior executives; and |
|
|
|
Plan for succession of the CEO and monitor managements succession planning for other key
executives. |
In discharging these obligations, directors are entitled to rely reasonably on the honesty and
integrity of their fellow directors and the Companys executives and its outside advisors and
auditors. Directors shall be entitled to reasonable directors and officers liability insurance on
their behalf; the benefits of indemnification to the fullest extent permitted by law under the
Companys charter, by-laws and any indemnification agreements; and exculpation as provided by state
law and the Companys charter.
The Company expects its employees to adhere to the highest possible standards of ethics and
business conduct with other employees, customers, stockholders and the communities it serves, and
to comply with all applicable laws, rules and regulations that govern its business. The Board of
Directors has adopted a code of ethics to promote honesty and integrity through out the Company.
The Board recognizes that the actual management of the business and affairs of the Company are
conducted by the CEO and other senior executives under his supervision and that, in performing the
management function, the CEO and other senior executives are obliged to act in a manner that is
consistent with the oversight functions and powers of the board and the standards of the Company
and to execute any specific plans, instructions or directions of the Board.
The adopted charter of the Nominating and Corporate Governance Committee is included in this
document as Appendix B. Interested parties may view our Company Code of Ethics on our corporate
website: www.bankofcommerceholdings.com.
Director Qualifications
The Board shall have a majority of directors who meet the independence criteria adopted by the
Board.
Qualifications: A director should possess personal and professional integrity; have good business
judgment, relevant experience and skills to be an effective director in conjunction with the full
Board in collectively serving the long-term interests of the Company stockholders. Directors should
be committed to devoting sufficient time and energy to diligently performing their duties as
directors.
Size of Board: The Board shall determine the appropriate size of the Board within the requirements
of the Companys charter and bylaws.
Selection process: In accordance with the policies and principles in its charter, the Nominating
and Corporate Governance Committee is responsible for identifying and recommending potential
director nominees to the Board for its approval when there is a vacancy on the board. The Chairman of the Nominating and
Corporate Governance Committee and the Chairman of the Board will extend an invitation to the
potential director nominee to join the board.
Page 16
Annual Review of Independence and Qualifications: The Nominating and Corporate Governance Committee
shall distribute annually a self-evaluation to the Board that includes an assessment of the
directors independence and qualifications.
Resignation from the board: An individual director should offer his or her resignation in the event
the directors principal occupation or business association changes substantially from the position
he or she held when originally invited to join the board. The board should consider the continued
appropriateness of the directors membership on the board under the changed circumstances and then
the board should determine whether or not to accept the directors resignation. Also, a director
should tender a resignation in the event there is a substantial conflict of interest between the
director and the Company or the Board and such conflict cannot be resolved to the satisfaction of
the board.
Retirement from the board: A director shall retire from the Board upon reaching the age of
seventy-two (72). At the discretion of the board of directors, terms may be extended once for a
period of one-year for specific business needs and to ensure good corporate governance.
Director Orientation and Continuing Education
Each year, the board and each of its committees evaluate their effectiveness. The Board views
self-evaluation as an ongoing process designed to achieve high levels of Board and committee
performance.
All new directors participate in an orientation program their first year as a director. As part of
the orientation, each director receives a copy of the Directors Policy Manual which includes a copy
of the Companys by-laws and charter. Orientation also includes presentations by Senior Management
to familiarize new directors with our strategic plans, significant financial, accounting and risk
management issues, compliance programs, conflict policies. Each director is required to review and
sign, on an annual basis, the Companys Code of Ethics and Insider Trading Policy. A new director
will attend a meeting with the CEO and CFO to be briefed on Board reports, significant financial,
accounting and risk management issues and current exploration and development projects.
All directors receive annual directors education in subjects relevant to the duties of a director,
including the study of corporate governance best practices and ethics. The Board requires directors
to participate in continuing education programs and reimburses directors for the expenses of such
participation. All directors have successfully completed or are in the process of completing the
Directors Certification Program sponsored by the California Bankers Association.
Board Attendance and Annual Meeting Policy
Directors are expected to attend all Board meetings and meetings of committees on which they serve,
and each annual stockholders meeting. Directors are expected to devote an adequate amount of time
and effort to properly discharge their responsibilities. Information and data are important to the
Boards understanding of the business and is distributed to the directors sufficiently in advance
of the meeting to permit their review.
The Board of Directors held 12 meetings during 2010. All directors attended at least 75% of the
aggregate number of meetings of the Board of Directors and of the committees on which such director
serves.
Page 17
Chairman of the Board
The Board appoints the Chairman of the Board. The Chairman is not the CEO. The Chairman will chair
all regular sessions of the Board and (with input from the CEO to the extent not inappropriate) set
the agenda for Board meetings, subject to the right of each board member to suggest the inclusion
of item(s) on the agenda.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE
Standards of Director Independence
A majority of the Board and all members of the Audit, Executive Compensation and the Nominating and
Corporate Governance Committees shall be independent. A director is deemed to be independent if he
or she does not have a direct or indirect material relationship with the Company or any of its
affiliates or with any senior executive member of the Company or any of its affiliates. Directors
must also be independent as that term is defined by the rules of the NASDAQ Global Market.
A director shall be deemed to have a material relationship with the Company and/or its affiliates
and thus, shall not be deemed independent if, within the past three years:
|
|
The director has been employed by the Company or its affiliates; |
|
|
|
An immediate family member of the director is or has been employed by the Company or any of
its affiliates as an officer; |
|
|
|
The director is or has been affiliated with or employed by the Companys present or former
auditor; |
|
|
|
The director or an immediate family member of the director is an officer, general partner,
director or large equity owner of a significant customer, paid advisor or supplier to the
Company of non professional services and goods; |
|
|
|
The director or an immediate family member of the director is an officer, director or
trustee of a charitable or tax-exempt organization to whom the Company makes substantial
charitable contributions. |
Other than Patrick J. Moty, all other members of the Board of Directors are independent.
Compensation Committee Interlocks and Insider Participation
No member of the Executive Compensation Committee of the Board of Directors serves or has served as
a bank officer or employee of Bank of Commerce Holdings or its subsidiaries. There are no
compensation committee interlocks between the Company and any other entity.
Family Relationships
No current directors have family members who are employed by the Company or a subsidiary. There are
no family relationships among executive officers, directors and director nominees.
Directors Access to Officers, Employees and Independent Advisors
Directors are encouraged to keep themselves informed with regard to the Company and its operations.
Directors have full and free access to Company officers and employees. Any meetings or contacts
that a director wishes to initiate may be arranged through the CEO, CFO or directly by the
director. Directors shall use their judgment to ensure that any such contact is not disruptive to
the Companys business operations and shall, to the extent that it is not appropriate, copy the CEO
on any written communications between a director and a Company officer or employee.
Page 18
Code of Ethics and Business Conduct
The Board has adopted a Code of Ethics that applies to all of our directors, officers and staff
including our principal executive officer and principal financial officer. The Code of Ethics
embodies our commitment to high standards of ethical and professional conduct. All directors,
officers and staff are required to annually certify that they have read and complied with the Code
of Ethics. The Code of Ethics consists of basic standards of business practice as well as
professional and personal conduct. A copy of the Code of Ethics is available on our website;
www.bankofcommerceholdings.com.
The Company will file a Form 8-K with the SEC, disclosing any material amendment to the Code of
Ethics or waiver of a provision of the Code of Ethics, including the name of the officer to whom
the waiver was granted, within four business days after such amendment or waiver.
Lending and Other Ordinary Business Transactions
During 2010, almost all of our directors as well as some of their respective family members and/or
affiliated entities, engaged in loan transactions and/or had other extensions of credit in the
ordinary course of business with our banking and mortgage subsidiaries. All of these transactions
were on substantially the same terms, including interest rates, collateral and repayment and other
terms, as those available at the time for similar transactions with unrelated parties. None of
these loans or credit transactions involves more than the normal risk of collectability or presents
other unfavorable features.
Policy and Procedures on Related Person Transaction
The Company adopted its code of ethics to promote a tone at the top of highest ethical standards
within the Company. The code of ethics requires all Company personnel to make immediate disclosure
of situations that might create a conflict of interest, or the perception of a conflict of
interest, which includes transactions involving entities with which such personnel are associated.
The Board of Directors recognizes that related party transactions present a heightened risk of
conflicts of interest and/or improper valuation (or the perception thereof). Such transactions,
after full disclosure of the material terms to the Board, must be approved by the members of the
Board who are not parties to the specific transaction and to determine that the transactions are
just and reasonable to the Company at the time of such approval, with those members of the Board
(if any) who have an interest in the transaction abstaining. Such procedures are consistent with
the terms of California corporate law but the Company does not presently have a written policy
evidencing such terms.
Page 19
COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors has established six standing committees, each of which is identified below.
Information about each committee of the Board, its members, purpose, and the number of meetings
held in 2010 follows.
The Board of Directors has a standing Audit Committee, Loan Committee, Executive Committee,
Asset/Liability Committee, Executive Compensation Committee, and Nominating and Corporate
Governance Committee. All Directors participate in the Long-Range planning of the Company. The
Executive Compensation Committee and Audit Committee also meet the standards of independence
prescribed by NASDAQ Global Market and applicable SEC regulations.
|
|
|
|
|
Audit and Qualified
Legal Compliance
Committee |
|
|
|
|
|
|
|
|
|
Members:
|
|
David H. Scott, Chairman
|
|
Gary Burks |
|
|
Russell L. Duclos
|
|
Lyle L. Tullis |
|
|
Jon Halfhide
|
|
Kenneth R. Gifford, Jr. |
|
|
|
|
|
Purpose: |
|
To assist the Board of Directors in fulfilling its
responsibilities to oversee management activities
related to accounting and financial reporting
policies, internal controls, auditing practices, and
legal and regulatory compliance; to review and
discuss the integrity of the Companys financial
statements and the adequacy and reliability of
disclosures to stockholders; to review the
qualifications and independence of the outside
accountants and the performance of internal and
outside accountants, to prepare the Committee report
included in the Companys annual proxy statement in
accordance with SEC rules; to act as the qualified
legal compliance committee of the Company in
accordance with its charter; and to perform the
audit committee and fiduciary audit committee
functions on behalf of the Company in accordance
with federal banking regulations. Independent
directors meet in an executive session of the Audit
Committee each meeting. The Audit and Qualified
Legal Compliance Committee is a standing committee
of the Board of Directors established in accordance
with Section 3(a)(58)(A) of the Exchange Act. The
Board of Directors has determined David H. Scott,
CPA and Jon Halfhide, CPA are audit committee
financial experts as defined in the SEC rules |
|
Number of meetings in 2010:
|
|
Six |
|
|
|
|
|
|
|
Nominating and
Corporate Governance
Committee |
|
|
|
|
|
Members:
|
|
Lyle L. Tullis, Chairman
|
|
Jon Halfhide |
|
|
Orin N. Bennett
|
|
Kenneth R. Gifford, Jr. |
|
|
|
|
|
Purpose: |
|
To assist the Board of Directors by identifying individuals qualified to become Board members and to recommend to the Board nominees for director and director nominees for each committee; to recommend to the Board the corporate governance guidelines of the Company and to oversee an annual review of the Boards performance; to recommend to the Board a determination of each non-management directors independence
under applicable rules and guidelines. |
|
Number of meetings in 2010:
|
|
Two |
|
|
Page 20
|
|
|
|
|
Executive Committee |
|
|
|
|
|
Members:
|
|
Kenneth R. Gifford, Jr.
Chairman
|
|
David H. Scott |
|
|
|
|
Lyle L. Tullis |
|
|
|
|
Orin N. Bennett |
|
|
|
|
|
Purpose: |
|
To review all current and pending strategies for achieving financial objectives; to review financial performance results; and to oversee the administration and effectiveness of financial risk management policies |
|
|
|
|
|
Number of meetings in 2010:
|
|
Twelve |
|
|
|
|
|
|
|
Executive Compensation
Committee |
|
|
|
|
Members:
|
|
Jon Halfhide, Chairman
|
|
Orin N. Bennett |
|
|
Gary Burks
|
|
Kenneth R. Gifford, Jr. |
|
|
|
|
|
Purpose: |
|
To discharge the Board of Directors responsibilities relating to
compensation of the Companys executive officers, including a review of the impact of the compensation policies
on the Companys risk exposure; to review the Compensation Discussion and Analysis and to recommend inclusion of
such disclosure in the Companys proxy statement; to conduct the annual chief executive officer performance
evaluation process; to evaluate and approve compensation plans, policies, and programs of the Company applicable to Executive Officers; and to oversee succession planning. |
|
Number of meetings in 2010:
|
|
Five |
|
|
|
Loan Committee |
|
|
|
|
Members:
|
|
Russell L. Duclos, Chairman
|
|
Kenneth R. Gifford, Jr. |
|
|
Patrick J. Moty, President & CEO
|
|
|
|
|
David H. Scott |
|
|
|
|
|
|
|
Purpose: |
|
To review the quality of the Banks loan portfolio and the trends affecting the loan portfolio; to oversee the effectiveness and administration of loan-related policies; and to review the adequacy of the allowance for loan and lease losses. The loan committee has the full Bank delegated authority for approval of loans. |
|
Number of meetings in 2010:
|
|
Thirty-five |
|
|
Asset Liability Committee |
|
|
|
|
Members:
|
|
Russell L. Duclos, Chairman |
|
Joseph Gibson |
|
|
David H. Scott
|
|
Patrick J. Moty, President & CEO |
|
|
Linda J. Miles, COO
|
|
Kenneth R. Gifford, Jr. |
|
|
Samuel D. Jimenez ,CFO |
|
|
|
|
|
|
|
Purpose: |
|
To review the quality of the Banks investment portfolio and current and future interest rate risks and trends; to produce and monitor the Interest Rate View; to oversee the effectiveness and administration of investment and interest rate risk related policies; to review and monitor exposure to interest rate risk. |
|
Number of meetings in 2010:
|
|
Five |
|
|
Page 21
Communications with the Board of Directors
The Board has established a process for stockholders and other interested parties to communicate
with independent members of the Board or a specific committee. Parties may send a letter to Bank of
Commerce Holdings, Attention: Corporate Secretary, 1951 Churn Creek Road, Redding, California
96002.
THE NOMINATING COMMITTEE AND NOMINATIONS FOR DIRECTOR
The Nominating and Corporate Governance Committee of the Board of Directors has been delegated the
responsibility to identify, evaluate, and recommend for nomination candidates for election as new
directors. Each of the members of the Committee is an independent director as determined by the
Board under the rules of the NASDAQ Global Market.
The goal of the Committees nominating process is to assist the Company in attracting competent
individuals with the requisite management, financial and other expertise who will act as directors
in the best interests of the company and all its stockholders. The Committee consults with other
Board members, the Companys Chief Executive Officer, and other Company personnel in this process.
The Committee will consider an individual recommended by a stockholder for nomination as a new
director provided the stockholder making the recommendation follows the procedures for submitting a
proposed nominees name and the required information described below.
Director Qualifications and the Nomination Process
The Board has approved certain minimum standards for candidates for service as a first-time
director and the Committee has developed a process for identifying and evaluating first-time
nominees in light of these standards and other such factors as the Committee deems appropriate.
These standards, and the Committees evaluation process, apply to all first-time nominees for
directors, including those nominees recommended by stockholders. This process is based on the
Committees familiarity with the composition of the current Board, its awareness of anticipated
openings, and its assessments of desirable talents or expertise. The Committee regularly reviews
the composition of the Board in light of its understanding of the backgrounds, industry, and
professional experience, and the various communities, both geographic and demographic, represented
by the current members. It also monitors the expected service dates of Board members, any planned
retirement dates, and other anticipated events that may affect a directors continued ability to
serve. The Committee periodically
reviews Board self-evaluations and information with respect to the business and professional
expertise represented by current directors in order to identify any specific skills desirable for
future Board members.
The Board has approved the following minimum qualifications for first-time nominees for director,
including nominees recommended by stockholders, for election to the Companys Board: (1) a
demonstrated breadth and depth of management and/or leadership experience, preferably in a senior
leadership role (i.e. chief executive officer, managing partner, president, chief financial
officer); (2) financial literacy or other professional or business experience relevant to an
understanding of the Company and its business; (3) a demonstrated ability to think and act
independently as well as the ability to work constructively in a group environment and (4) the
financial ability to invest in the Company. The Committee will determine, in its sole discretion,
whether a nominee meets these minimum qualifications. The Committee does not assign specific
weights to particular criteria and no particular criterion is necessarily applicable to all
prospective nominees. The Company believes that the backgrounds and qualifications of the
directors, considered as a group, should provide a significant composite mix of experience,
knowledge and abilities that will allow the Board to fulfill its responsibilities. Nominees are not
discriminated against on the basis of race, religion, national origin, sexual orientation,
disability or any other basis proscribed by law.
The Committee is responsible for managing the new director nomination process and may use a variety
of sources. The Committee then commences an inquiry to obtain sufficient information on the
background of a potential new director-nominee.
Page 22
Included in this inquiry is an initial review of the candidate with respect to the following three
factors: whether the individual meets the minimum qualifications for first-time director nominees
approved by the Board; whether the individual would be considered independent under the NASDAQ
Global Market rules and Companys standard of independence; and whether the individual would meet
any additional requirements imposed by law or regulation on the members of the Audit and Executive
Compensation Committees of the Board.
Following the initial review, the Committee arranges an introductory meeting with the candidate and
the Companys Chief Executive Office, Chairman of the Board of Directors, and in some cases with
additional directors, to determine the candidates interest in serving on the Board.
The Committee, together with several members of the Board and the Chief Executive Officer then
conducts a comprehensive interview with the candidate. The individual will also be asked to provide
the information required to be disclosed in the Companys proxy statement.
Assuming a satisfactory conclusion to the process outlined above, the Committee then presents the
candidates name to the Board of Directors for election as a director.
Director Nominations by Stockholders
A stockholder who wishes to submit an individuals name for consideration by the Committee for
nomination as a director of the Company must provide (1) the stockholders name and address and the
number of shares of the Companys common stock beneficially owned by the stockholder; (2) the name
of the proposed nominee and the number of shares of the Companys common stock beneficially owned
by the nominee; (3) sufficient information about the nominees experience and qualifications for
the Committee to make a determination whether the individual would meet the minimum qualifications
for directors; and (4) such individuals written consent to serve as a director of the Company, if
elected. The Committee has the right to request, and the stockholder will be required to provide,
such additional information with respect to the stockholder nominee as the Committee may deem
appropriate or desirable to evaluate the proposed nominee in accordance with the nomination process
described above, including the information about the proposed nominee that is required to be
disclosed by the Company in its proxy statement under Regulation 14A of the Securities Exchange Act
of 1934, as amended.
Page 23
INFORMATION ON DIRECTOR AND EXECUTIVE COMPENSATION
EXECUTIVE COMPENSATION
Compensation Discussion and Analysis
This Compensation Discussion and Analysis describes our executive compensation philosophy and
objectives. The tables that follow present the compensation paid for 2010 to our named executive
officers. When we refer to the named executive officers, we mean the following six individuals:
1. |
|
Patrick J. Moty, President and Chief Executive Officer (our Principal Executive Officer) |
|
2. |
|
Linda J. Miles, Executive Vice President and Chief Operating Officer |
|
3. |
|
Samuel D. Jimenez, Senior Vice President and Chief Financial Officer (our Principal
Financial and Accounting Officer) |
|
4. |
|
Randall S. Eslick, Regional President Roseville Bank of Commerce |
|
5. |
|
Robert C. Oberg, Senior Vice President and Chief Risk Officer |
|
6. |
|
Theodore Cumming, Senior Vice President and Chief Credit Officer |
Strategic Role of Executive Compensation
The Board of Directors of Bank of Commerce Holdings strives to ensure that its compensation plan is
consistent with the strategic goals and objectives of the Company and maintains the standards of
good corporate governance. The Board of Directors has appointed the Executive Compensation
Committee (Compensation Committee) to play a central role in formulating our compensation
philosophy and programs and in making pay decisions for our named executive officers. The Companys
executive compensation philosophy and programs play an important role in achieving the objective of
long-term growth in shareholder value. As a guiding principle, we design our compensation programs
to reward our named executive officers for recent performance and to motivate them to achieve
strong future performance for the Company and long-term value for our shareholders. All actions
taken by the Compensation Committee are ratified by the full Board of Directors.
In connection with the Companys participation in the United States Department of Treasury
(Treasury) Troubled Asset Relief Program (TARP) Capital Purchase Program, the Compensation
Committee must meet every six months with the Companys Chief Risk Officer or other senior risk
officers to discuss and review the relationship between the Companys risk management policies and
practices and its executive incentive compensation arrangements, identifying and making reasonable
efforts to limit any features in such compensation arrangements that might lead to the named
executive officers taking unnecessary or excessive risks that could threaten the value of the
Company. Other effects of the TARP rules include:
|
|
|
The Company cannot pay or accrue cash bonuses to the Chief Executive Officer; |
|
|
|
|
The Company cannot give the Chief Executive Officer equity except in the form of
long-term restricted stock; |
|
|
|
|
There are restrictions on severance pay for the named executive officers plus the
next five highest ranking officers; |
|
|
|
|
There are claw-back restrictions on bonuses paid to the named executive officers
plus the next twenty highest ranking officers; |
|
|
|
|
The Company has adopted a Luxury Expenditures Policy limiting certain expenditures; |
|
|
|
|
The Company cannot gross up salaries to compensate for taxes paid to the named
executive officers plus the next twenty highest ranking officers. |
Page 24
Executive Compensation Objectives
To attract and retain talented management with proven skills and experience, the Company must offer
a compensation program that compares favorably with those offered by other peer financial and
non-financial companies with which we compete for a limited pool of highly qualified executive
talent. To sustain our financial performance, the Company believes that we should closely link
compensation to our long-term performance and, for those named executives responsible for business
divisions, to the performance of their division.
Given the Company philosophy to link compensation to Company, business, and individual performance,
our compensation programs for our named executives are built upon three objectives:
|
1. |
|
To compete favorably with our peers in attracting and retaining qualified individuals as named executives by offering competitive pay; |
|
|
2. |
|
To pay for performance by compensating our named executives based upon: |
|
a) |
|
The Companys performance compared to peer group performance, |
|
|
b) |
|
The Division performance for those named executives who manage divisions, and |
|
3. |
|
To align our named executives interest with our shareholders interest
in increased share value by generally using stock options for
long-term compensation, so our executives benefit only if our stock
price rises and our shareholders are similarly rewarded. |
Executive Compensation Components
Named executive officer compensation includes the following elements:
|
|
|
|
|
Pay Element |
|
What the Pay Element Rewards |
|
Purpose of the Pay Element |
Base Salary
|
|
Core competence in the Executives role relative to skills, years of experience and contributions to the Company.
|
|
Provides for fixed compensation based on competitive market salary levels. |
|
|
|
|
|
Annual Cash
Incentives
|
|
Contributions toward the Companys achievement of specified profitability, growth, and credit quality.
|
|
Provides focus on meeting annual goals that lead to the long-term success of the Company; Stresses annual performance-based cash incentive compensation; and motivates achievement of critical annual performance metrics. |
|
|
|
|
|
Long-Term
Incentives
|
|
Stock Options/Restricted Stock:
The Companys stock price performance; and continued employment with the Company during a five-year vesting period.
|
|
Maximize stock price performance;
Increase Executive ownership in the Company; and retention in a challenging business environment and competitive labor market. |
|
|
|
|
|
Retirement
Benefits
|
|
The Companys employee benefit plans are available to eligible employees, including the Executives; to reward long-term service to the Company, and include both tax-qualified and nonqualified retirement plans.
The Company offers a qualified 401(k) program that the Executives are eligible to participate in.
|
|
Encourages retention of Executives for the balance of his/her career.
Provides a tax-deferred retirement savings plan subject
to IRS limitations on qualified plans. |
Page 25
|
|
|
|
|
Pay Element |
|
What the Pay Element Rewards |
|
Purpose of the Pay Element |
Retirement Benefits
(continued)
|
|
The Salary Continuation Plans are nonqualified, noncontributory plans that provide the Executives with retirement benefits.
|
|
The Salary Continuation Plans make available retirement benefits for the Executives commensurate with those available to comparable peer executive officers. |
|
|
|
|
|
Health and Welfare
Benefits
|
|
Executives participate in employee benefit plans generally available to all employees, including medical, health, life insurance, disability plans, and vacation and personal absence time.
|
|
These benefits are part of a broad-based, competitive total compensation program. |
|
|
|
|
|
Additional Benefits and
Perquisites
|
|
Active participation in business promotional activities on behalf of the Company.
|
|
Certain Executives are provided an auto allowance to promote Company business in the Companys market. Club memberships have been approved for certain Executives for future implementation to promote the Company business. |
|
|
|
|
|
Change in Control and Termination Benefits
|
|
The employment agreements provide severance benefits if an Executives employment is terminated within two years after a change in control.
|
|
Change in control severance benefits are designed to retain the Executives and provide continuity of management in the event of an actual or threatened change in control. |
Overview of Compensation and Process
Base salaries are set for our named executive officers annually at the regularly scheduled meetings
of the Compensation Committee between the months of December and April. At this meeting, the
Compensation Committee also reviews and recommends the Annual Cash Incentive Award opportunities
for the new fiscal year and recommends stock option awards for the Companys named executive
officers and certain other eligible employees.
It is the practice of the Compensation Committee to periodically review the history of all the
elements of each named executive officers total compensation over previous years and compare the
compensation of the named executive officers with that of the executive officers in an appropriate
market place and industry peer group.
During 2010 the elements of compensation were compared for reasonableness to the 2010 Compensation
and Benefits Benchmark Survey published by the California Bankers Association. Founded in 1891 the
California Bankers Association (CBA) is one of the largest state banking trade associations in
the country. Each year the CBA updates the survey based on industry needs. The survey provides base
salary, incentive and commission compensation data for 125 job classifications, including
directors compensation information, human resources
practices, comparative healthcare costs information and employee benefit summary statistics. 107
banks participated in the 2010 survey.
Compensation Objectives
In order to set competitive benchmarks for 2010 annual and long-term compensation for the named
executives, the Compensation Committee reviewed data compiled by the California Bankers
Association. This data presented Peer Group annual cash, long-term incentive, and total
compensation amounts as reported in 2010 annual survey for those companies named executive
officers whose positions and responsibilities most closely match those of our named executive
officers. For each proxy statement position, this compensation data was examined for the 25th, 50th
and 75th percentile. The Compensation Committee used this information to help determine competitive
benchmarks for the 2010 salary and annual cash incentive awards and long-term compensation awards
for the named executive officers.
Typically, the Chief Executive Officer makes compensation recommendations to the Compensation
Committee with respect to the executive officers who report to him. Such executive officers are not
present at the time of these deliberations.
Page 26
The Chairman of the Board then makes compensation recommendations to the Compensation Committee
with respect to the Chief Executive Officer, who is absent from that meeting. The Compensation
Committee may accept or adjust such recommendations.
Company and Division Performance
At the end of the fiscal year, the Compensation Committee reviews the Companys and each divisions
financial performance by comparing financial results to the Peer Group using the quantitative
performance measures listed below (all or in part), as part of its evaluation of the Companys
annual performance and its determination of the annual incentive awards to our named executives:
|
|
|
Net income, EPS Growth; |
|
|
|
|
Return on Average Assets; |
|
|
|
|
Return on Average Equity; |
|
|
|
|
Revenue Growth; |
|
|
|
|
Core Deposit Growth; |
|
|
|
|
Deposit Market Share Growth; |
|
|
|
|
Loan Growth; |
|
|
|
|
Classified Assets Ratio; |
|
|
|
|
Efficiency Ratio; and |
|
|
|
|
Investment Portfolio. |
Individual Objectives
In addition to the Company financial goals, the Compensation Committee establishes individual
objectives for our named executive officers. These objectives include compliance with Company
policies on information security, regulatory compliance, risk management and team building, or
other directives mandated by the Board of Directors.
The Compensation Committee may adjust or eliminate incentive compensation awards, regardless of
achieving financial performance goals, if the Compensation Committee determines that a named
executive officer has
failed to comply with our Code of Ethics or policies on information security, regulatory compliance
and risk management.
Named Executive Officer Compensation
The components are intended to work together to compensate the executive officer fairly for
services, reward the executive officer based upon the Companys overall performance and, depending
on the position, their own performance during the year. In assessing the executive officers total
rewards, the Compensation Committee reviews each component of an executives compensation and
considers and evaluates pay mix, the competitive market, the value of total pay, benefits and
perquisites.
Base Salary
It is the goal of the Companys Compensation Committee to establish salary compensation for its
named executive officers based on the Companys operating performance relative to the comparable
Peer Group over a three-year to five-year period, along with compensation recommendations from the
Chief Executive Officer.
Page 27
Base salary is generally established by an individuals performance, competent and effective
execution of strategic objectives, potential, level of responsibilities, promotions, other
compensation targeting total cash compensation at or above the 50th percentile when
performance goals are achieved and at a higher level (75th or above) when maximum
performance results are achieved.
Cash Incentive Compensation
The Companys Annual Cash Incentive Plan allows the Company to provide cash incentives to named
executive officers based on the Companys overall financial performance. The Annual Cash Incentive
Plan is designed to reward the Companys executives for the achievement of short-term financial
goals, including increases in performance against peer banks, the achievement of short-term and
long-term strategic goals, and overall financial performance of the Company. Cash incentive
percentages for executive officers were initially proposed by a compensation consultant based on an
analysis of peer banks and industry sector considerations. Those percentages are as follows: for
executive officers other than the Chief Executive Officer, the range is up to 25% of base salary;
and for the Chief Executive Officer, the range is up to 35% of base salary.
Use of Long-Term Compensation to align the interest of our Named Executives and Shareholders
The Compensation Committee believes that stock options are the most effective form of equity-based
compensation to reward our named executive officers for their contributions to the Companys
long-term performance. Because a primary interest of our shareholders is increased share value,
stock options which produce value as compensation only if the Companys stock price increases most
directly aligns our named executive officers interests with our shareholders interests to increase
value over the long-term.
Executive officers are eligible for discretionary incentive stock option awards based on the
following percentages: for executive officers other than the Chief Executive Officer, the range is
0% 5% of base salary as the number of options considered for award. For the Chief Executive
Officer, the range is 0% 6% of base salary as the number of options considered for award.
Although each executive officer is eligible to receive an award at the discretion of the
Compensation Committee, the granting of the award as to any individual, officer or as a group, is
first at the discretion of the Chief Executive Officer and then, based on his recommendation, at
the discretion of the Compensation Committee and the entire Board of Directors. The Compensation
Committee may choose whether to award a bonus and decides on the actual level of the award in light
of all relevant factors after completion of the applicable fiscal year.
Perquisites
The Compensation Committee believes that offering certain perquisites helps in the operation of the
business as well as assists the Company to recruit and retain key executives. The Companys named
executive officers may participate in the same benefit programs available to all employees. This
includes health, life and disability insurance, participation in non-qualified 401(k) plans, and in
some cases, automobile allowance and country club memberships to our executive management.
Post-Retirement Arrangements
The Company maintains a Supplemental Executive Retirement Plan (SERP) and a change in control
severance provision in employment agreements for the named executive officers, providing for
certain payments following the termination of employment for nine executive officers. The payments
are fixed by contract and do not depend on years of credited service. The Company makes
contributions to segregated accounts for the benefit of the plan beneficiaries.
Page 28
The SERP agreements provide for five general classes of benefits for executive officers, which
benefits vest over a period of six (6) to nineteen (19) years with credit for prior service or as
determined by the Chief Executive Officer and the Board of Directors:
|
1. |
|
Normal Retirement Benefits. The normal retirement benefit is
calculated to provide a target benefit of up to seventy-five percent
(75%) of the executives compensation at the time of retirement (age
65) or a lesser amount as determined by the Chief Executive Officer
and the Board of Directors; |
|
|
2. |
|
Early Termination Benefit. The early termination benefit is the vested
portion of the target retirement benefit; |
|
|
3. |
|
Disability Benefit. The disability benefit is a Disability Lump Sum
Benefit specified in the agreement for the plan year immediately
preceding the disability, payable only upon total disability as
defined in the agreement; |
|
|
4. |
|
Death Benefit. The death benefit is an amount determined by a formula
that takes into account the number of years of service and the
anticipated compensation level at the age of retirement; and |
|
|
5. |
|
Change of Control Benefit. The change of control benefit is an amount
determined as follows: Executive officers Fully Vested Present Value
Benefit of the Supplemental Executive Retirement Plan payable at age
65 for the current plan year plus one times the executive officers
current Plan Year Compensation (except with respect to the Chief
Executive Officer and Chief Operating Officer, which is two times plan
year compensation). This benefit is payable only in the event of a
change in control as defined in the Salary Continuation Agreement and
is limited by the provisions of Internal Revenue Code section 280(g). |
In consulting with its benefit plan consultant (Clark Consulting), the Company determined that it
would be more cost effective for the Company to acquire prepaid policies of insurance to fund these
anticipated future obligations than to pay annual premiums. The Company, as a result of acquiring
the prepaid policies, will have cash values in the policies in excess of the amount paid for those
policies.
Commitment to Quality Governance
The Compensation Committee has adopted the following procedures intended to ensure quality
governance of the Companys pay for performance philosophy:
|
|
|
Only independent members of the Board of Directors may serve on the Compensation Committee; |
|
|
|
|
The Compensation Committee meets on a regular basis as needed throughout the year.
Generally the Compensation Committee will review year-to-date financial performance versus
budget; year-to-date and multi year performance versus competitor group performance
(Uniform Bank Performance Report); executive officer stock ownership levels; each
executive officers target total compensation for the year; and other topics as
appropriate; |
|
|
|
|
At least once a year, the Compensation Committee reviews each executive officers total
compensation package, including base salary, cash and stock incentive awards, qualified
and non-qualified retirement and deferred compensation benefit packages and compares to
the Peer Group; |
|
|
|
|
The committee utilizes independent compensation reports to assist in the analysis of
compensation packages; |
|
|
|
|
At least once a year, the Compensation Committee reviews and reassesses its charter and
recommends any proposed changes to the Board of Directors for approval. The Compensation
Committee also conducts an annual review of its own performance; and |
|
|
|
|
The Compensation Committee reports on its meetings to the full Board of Directors.
The independent members of the Board of Directors, after a review of the Companys
performance, ratify each year the total compensation awards for the named executive
officers. |
Page 29
Limitations on Executive Compensation; Evaluation of Risk
The Company is required as a participant in the TARP Capital Purchase Program to place limits on
compensation of its senior executive officers (SEO), review SEO compensation for incentives
that would promote undue risk, and to provide shareholders the opportunity to vote on a non-binding
advisory approval of executive compensation. The evaluation of risk and compensation is discussed
in the Compensation Committee Report appearing in this proxy statement.
Summary Compensation Table
The following table sets forth certain summary information concerning compensation paid to the
Companys named executive officers as of December 31, 2010, and whose aggregate salary and bonus
exceeded $100,000 in fiscal year 2010.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-Qualified |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-Equity |
|
|
|
|
|
|
Deferred |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Incentive Plan |
|
|
Option |
|
|
Compensation |
|
|
All Other |
|
|
Total |
|
Name and Principal |
|
|
|
|
|
Salary |
|
|
Compensation |
|
|
Awards |
|
|
Earnings |
|
|
Compensation |
|
|
Compensation |
|
Position |
|
Year |
|
|
(1) ($) |
|
|
(2) ($) |
|
|
(3) ($) |
|
|
(4) ($) |
|
|
(5) ($) |
|
|
($) |
|
|
Patrick J. Moty |
|
|
2010 |
|
|
$ |
305,000 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
34,826 |
|
|
$ |
97,209 |
|
|
$ |
437,035 |
|
|
|
|
2009 |
|
|
$ |
250,865 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
21,967 |
|
|
$ |
92,616 |
|
|
$ |
365,448 |
|
President & Chief |
|
|
2008 |
|
|
$ |
229,327 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
12,592 |
|
|
$ |
85,597 |
|
|
$ |
327,516 |
|
Executive Officer
(Principal Executive Officer) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Linda J. Miles |
|
|
2010 |
|
|
$ |
206,000 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
81,275 |
|
|
$ |
88,989 |
|
|
$ |
376,264 |
|
|
|
|
2009 |
|
|
$ |
206,000 |
|
|
$ |
70,000 |
|
|
$ |
0 |
|
|
$ |
62,189 |
|
|
$ |
81,500 |
|
|
$ |
419,689 |
|
EVP & Chief |
|
|
2008 |
|
|
$ |
200,000 |
|
|
$ |
11,846 |
|
|
$ |
0 |
|
|
$ |
50,395 |
|
|
$ |
45,264 |
|
|
$ |
307,505 |
|
Operating Officer |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Samuel D. Jimenez |
|
|
2010 |
|
|
$ |
178,000 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
2,883 |
|
|
$ |
24,999 |
|
|
$ |
205,882 |
|
|
|
|
2009 |
|
|
$ |
160,970 |
|
|
$ |
59,356 |
|
|
$ |
0 |
|
|
$ |
686 |
|
|
$ |
27,225 |
|
|
$ |
248,237 |
|
Senior VP & Chief |
|
|
2008 |
|
|
$ |
152,884 |
|
|
$ |
2,378 |
|
|
$ |
4,830 |
|
|
$ |
0 |
|
|
$ |
3,660 |
|
|
$ |
163,752 |
|
Financial Officer
(Principal Accounting and Financial Officer) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Randall S. Eslick |
|
|
2010 |
|
|
$ |
180,255 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
11,867 |
|
|
$ |
43,163 |
|
|
$ |
235,285 |
|
|
|
|
2009 |
|
|
$ |
175,020 |
|
|
$ |
35,000 |
|
|
$ |
0 |
|
|
$ |
6,658 |
|
|
$ |
46,373 |
|
|
$ |
263,051 |
|
Regional President |
|
|
2008 |
|
|
$ |
177,039 |
|
|
$ |
0 |
|
|
$ |
2,760 |
|
|
$ |
3,694 |
|
|
$ |
14,150 |
|
|
$ |
197,643 |
|
Roseville Bank of
Commerce |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Robert C. Oberg |
|
|
2010 |
|
|
$ |
172,000 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
3,895 |
|
|
$ |
175,895 |
|
|
|
|
2009 |
|
|
$ |
120,654 |
|
|
$ |
30,000 |
|
|
$ |
7,487 |
|
|
$ |
0 |
|
|
$ |
640 |
|
|
$ |
158,781 |
|
Senior VP & |
|
|
2008 |
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
Chief Risk Officer |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ted Cumming |
|
|
2010 |
|
|
$ |
163,250 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
3,127 |
|
|
$ |
20,225 |
|
|
$ |
186,602 |
|
|
|
|
2009 |
|
|
$ |
152,038 |
|
|
$ |
37,380 |
|
|
$ |
0 |
|
|
$ |
900 |
|
|
$ |
22,372 |
|
|
$ |
212,690 |
|
Senior VP & |
|
|
2008 |
|
|
$ |
142,692 |
|
|
$ |
0 |
|
|
$ |
4,140 |
|
|
$ |
0 |
|
|
$ |
3,660 |
|
|
$ |
150,492 |
|
Chief Credit Officer |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Page 30
|
|
|
1) |
|
Base salaries include 401(K) contributions made by the named executive officers of
approximately $84,415 during 2010. |
|
2) |
|
The Companys Annual Cash Incentive Plan (the Annual Cash Incentive Plan) provides
cash incentives to executive officers based on the Companys overall financial
performance, and, in some cases, individual performance and personal goals. This
income item includes bonus amounts in the year earned rather than in the year paid.
Cash incentive awards are accrued in a range of 25-45% of the individuals salary. The
maximum value payable under each performance award assuming the highest level of
performance is as follows: Patrick J. Moty, $137,250, Linda J. Miles, $70,000, Samuel
D. Jimenez, $62,300, Randall S. Eslick, $63,089, Robert C. Oberg, $43,000 and Ted
Cumming, $40,812. |
|
3) |
|
The value of the stock option award is computed based upon the grant date fair value,
consistent with FASB ASC Topic 718. No options were granted during 2010 and one option
was granted in 2009. Four options were granted in 2008. |
|
4) |
|
The Company pays interest on segregated accounts for the benefit of SERP beneficiaries. |
|
5) |
|
Other Compensation consists of perquisites and contributions to the SERP. |
|
|
|
Perquisite expenses represent an automobile for business use or car allowance,
and membership expenses in connection with the use of a private club for
business purposes, particularly for the purpose of entertaining the Banks
customers. The officers may have derived some personal benefit from the use of
such automobiles and membership. |
|
|
|
The Company, after reasonable inquiry, believes that the value of any personal
benefit not directly related to job performance which is derived from the
personal use of such automobile and country club membership does not exceed
$10,000 per year in the aggregate for any single executive officer. Perquisite
(automobile and country club membership) amounts were $11,400, $11,400 and
$11,400 for Patrick J. Moty in 2010, 2009 and 2008, respectively; $8,460 for
Samuel D. Jimenez in 2010 and 2009; $3,468 for Linda Miles in each of 2010,
2009 and 2008; $9,720 for Randall Eslick in each of 2010, 2009 and 2008; $3,895
in 2010 and $640 in 2009 for Robert C. Oberg and $3,900 and $3,660 for Ted
Cumming in 2010 and 2009. The remaining balance represents contributions made
in each year in connection with the SERP. |
Grants of Plan-Based Awards
The following table provides information regarding grants of stock options and other plan-based
awards to each of the Companys named executive officers during the fiscal year ended December 31,
2010.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Potential |
|
|
Potential |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Realizable |
|
|
Realizable |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Value at |
|
|
Value at |
|
|
|
Number of |
|
|
Percentage of |
|
|
|
|
|
|
|
|
|
|
Assumed |
|
|
Assumed |
|
|
|
Securities |
|
|
Total |
|
|
|
|
|
|
|
|
|
|
Annual Rates of |
|
|
Annual Rates of |
|
|
|
Underlying |
|
|
Options |
|
|
|
|
|
|
|
|
|
|
Stock Price |
|
|
Stock Price |
|
|
|
Options |
|
|
Granted to |
|
|
|
|
|
|
|
|
|
|
Appreciation for |
|
|
Appreciation for |
|
|
|
Granted (#) |
|
|
Employees in |
|
|
Exercise Price |
|
|
Expiration |
|
|
Option Term 5 |
|
|
Option Term 10 |
|
Name |
|
(1) |
|
|
Fiscal Year |
|
|
($/Share)(2) |
|
|
Date (3) |
|
|
%($) |
|
|
%($) |
|
|
Patrick J. Moty |
|
|
0 |
|
|
|
0 |
|
|
$ |
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
Linda J. Miles |
|
|
0 |
|
|
|
0 |
|
|
$ |
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
Samuel D. Jimenez |
|
|
0 |
|
|
|
0 |
|
|
$ |
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
Randall Eslick |
|
|
0 |
|
|
|
0 |
|
|
$ |
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
Robert C. Oberg |
|
|
0 |
|
|
|
0 |
|
|
$ |
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
Ted Cumming |
|
|
0 |
|
|
|
0 |
|
|
$ |
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
|
1) |
|
The right to exercise these stock options vests on an annual basis over a five-year
period from the date of the grant. Under the terms of the Companys stock plans, the
committee designated by the Board of Directors to administer such plans retains the
discretion, subject to certain limitations, to modify, extend or renew outstanding options
and to re-price outstanding options. |
Page 31
|
|
|
|
|
Options may be re-priced by canceling outstanding options and reissuing new options with an
exercise price equal to the fair market value on the date of reissue, which may be lower than
the original exercise price of such canceled options. Re-pricing options result in a
compensation penalty. |
|
2) |
|
The exercise price is equal to 100% of the fair market value on the date of grant as determined
by the NASDAQ Global Market close the date of the grant. |
|
3) |
|
The options have a term of ten years, subject to earlier termination in certain events related
to termination of employment. |
|
4) |
|
The five percent and ten percent assumed rates of appreciation are suggested by the rules of the
Securities and Exchange Commission and do not represent the Companys estimate or projection of the
future price of the Common Stock. No assurance can be given that any of the values reflected in the
table will be achieved. |
Outstanding Equity Awards at Fiscal Year End
The following table presents certain information concerning the outstanding stock option awards
held as of December 31, 2010 by each named executive officer of the Company.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Incentive |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Plan |
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of |
|
|
Awards: |
|
|
|
|
|
|
|
|
|
Number of |
|
|
Securities |
|
|
Number of |
|
|
|
|
|
|
|
|
|
Securities |
|
|
Underlying |
|
|
Securities |
|
|
|
|
|
|
|
|
|
Underlying |
|
|
Unexercised |
|
|
Underlying |
|
|
|
|
|
|
|
|
|
Unexercised |
|
|
Options (#) |
|
|
Unexercised |
|
|
Option |
|
|
Option |
|
|
|
Options (#) |
|
|
Un- |
|
|
Unearned |
|
|
Exercise |
|
|
Expiration |
|
Name |
|
Exercisable |
|
|
exercisable |
|
|
Options (#) |
|
|
Price ($) |
|
|
Date |
|
|
Patrick J. Moty |
|
|
15,600 |
|
|
|
0 |
|
|
|
0 |
|
|
$ |
6.67 |
|
|
|
8/1/2011 |
|
Patrick J. Moty |
|
|
1,800 |
|
|
|
0 |
|
|
|
0 |
|
|
$ |
7.30 |
|
|
|
7/16/2012 |
|
Patrick J. Moty |
|
|
3,900 |
|
|
|
0 |
|
|
|
0 |
|
|
$ |
10.60 |
|
|
|
6/15/2014 |
|
Patrick J. Moty |
|
|
8,000 |
|
|
|
12,000 |
|
|
|
0 |
|
|
$ |
10.49 |
|
|
|
10/16/2017 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Linda J. Miles |
|
|
6,000 |
|
|
|
0 |
|
|
|
0 |
|
|
$ |
6.75 |
|
|
|
1/1/2013 |
|
Linda J. Miles |
|
|
6,000 |
|
|
|
0 |
|
|
|
0 |
|
|
$ |
10.60 |
|
|
|
6/15/2014 |
|
Linda J. Miles |
|
|
4,000 |
|
|
|
6,000 |
|
|
|
0 |
|
|
$ |
10.49 |
|
|
|
10/16/2017 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Samuel Jimenez |
|
|
7,500 |
|
|
|
0 |
|
|
|
0 |
|
|
$ |
10.72 |
|
|
|
1/1/2013 |
|
Samuel Jimenez |
|
|
700 |
|
|
|
2,800 |
|
|
|
0 |
|
|
$ |
6.50 |
|
|
|
10/14/2018 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Randy Eslick |
|
|
13,500 |
|
|
|
0 |
|
|
|
0 |
|
|
$ |
5.42 |
|
|
|
6/1/2011 |
|
Randy Eslick |
|
|
2,250 |
|
|
|
0 |
|
|
|
0 |
|
|
$ |
7.30 |
|
|
|
7/16/2012 |
|
Randy Eslick |
|
|
4,500 |
|
|
|
0 |
|
|
|
0 |
|
|
$ |
10.60 |
|
|
|
6/15/2014 |
|
Randy Eslick |
|
|
400 |
|
|
|
1,600 |
|
|
|
0 |
|
|
$ |
6.50 |
|
|
|
10/14/2018 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Robert C. Oberg |
|
|
1,600 |
|
|
|
2,400 |
|
|
|
0 |
|
|
$ |
5.00 |
|
|
|
04/21/2019 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ted Cumming |
|
|
8,100 |
|
|
|
0 |
|
|
|
0 |
|
|
$ |
6.67 |
|
|
|
8/1/2011 |
|
Ted Cumming |
|
|
1,350 |
|
|
|
0 |
|
|
|
0 |
|
|
$ |
7.30 |
|
|
|
7/16/2012 |
|
Ted Cumming |
|
|
4,500 |
|
|
|
0 |
|
|
|
0 |
|
|
$ |
10.60 |
|
|
|
6/15/2014 |
|
Ted Cumming |
|
|
600 |
|
|
|
2,400 |
|
|
|
0 |
|
|
$ |
6.50 |
|
|
|
10/14/2018 |
|
Page 32
Option Exercises and Stock Vested
The following table presents certain information concerning the exercise of options and vesting of
stock awards by each of our named executive officers during the fiscal year ended December 31,
2010, including the value of gains on exercise and the value of the stock awards.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Options Vested |
|
|
Options Exercised |
|
|
Value Realized |
|
Name |
|
during 2010 |
|
|
during 2010 |
|
|
($)(1)(2) |
|
|
Patrick J. Moty |
|
|
4,000 |
|
|
|
0 |
|
|
|
0 |
|
Linda J. Miles |
|
|
2,000 |
|
|
|
0 |
|
|
|
0 |
|
Samuel D. Jimenez |
|
|
700 |
|
|
|
0 |
|
|
|
0 |
|
Randall S. Eslick |
|
|
400 |
|
|
|
0 |
|
|
|
0 |
|
Robert C. Oberg |
|
|
800 |
|
|
|
0 |
|
|
|
0 |
|
Ted Cumming |
|
|
600 |
|
|
|
0 |
|
|
|
0 |
|
|
|
|
1) |
|
Based on the fair market value of the Companys Common Stock at December 31, 2010 of $4.25
per share less the applicable exercise price per share. The fair market value of the Companys
Common Stock at December 31, 2010 was determined based on the last reported sale of the
Companys common stock in 2010 as reported on the NASDAQ Global Market. |
|
2) |
|
The realized value represents the market value at exercise less the exercise price. |
Nonqualified Deferred Compensation- Supplemental Executive Retirement Plan
In April 2001, amended December 31, 2006, September 30, 2007, and October 14, 2008, the Board of
Directors approved the implementation of the Supplemental Executive Retirement Plan (SERP), which
is a non-qualified executive benefit plan in which the Company agrees to pay the executive
additional benefits in the future in return for continued satisfactory performance by the
executive.
The payments are fixed by contract and do not depend on years of credited service. The Company
makes contributions to segregated accounts for the benefit of the Salary Continuation Plan
beneficiaries. Benefits under the supplemental executive retirement plan include income generally
payable commencing upon a designated retirement date for the employees life, disability, or
termination of employment, and a death benefit for the participants designated beneficiaries.
Key-man life insurance policies were purchased as an investment to offset the Companys contractual
obligation to pay pre-retirement death benefits and to recover the Companys cost of providing
benefits. The executive is the insured under the policy, while the Company is the owner and
beneficiary. The insured executive has no claim on the insurance policy, its cash value or the
proceeds thereof. A termination resulting from a reason other than specific cause or change of
control will be deemed an early retirement. In the event of an early retirement, the vested balance
will be paid as a lump sum or over a period of five years. In the event of a change in control, the
payment terms are fixed (see discussion below), and would be paid in addition to amounts owned
under the executives employment agreement. In the event of a termination for cause, no payments
will be made to the terminated executive.
The following table illustrates the approximate annual retirement income that may become payable to
a named executive officer assuming benefits commence at age 65, and age 61 in the case of Mrs.
Miles. Mr. Motys and Mrs. Miles benefits are payable over twenty years or life. Mr. Jimenez, Mr.
Eslick and Mr. Cumming benefits are payable over a period of ten years.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of |
|
Present Value of |
|
Payments |
|
Annual |
|
Vested Balance |
|
|
Years Credited |
|
Accumulated |
|
During Last |
|
Retirement |
|
at Last Fiscal |
Name |
|
Service (#) |
|
Benefit ($) |
|
Fiscal Year ($) |
|
Benefit |
|
Year |
|
Patrick J. Moty |
|
|
5 |
|
|
$ |
396,917 |
|
|
$ |
0 |
|
|
$ |
150,000 |
|
|
$ |
396,917 |
|
Linda J. Miles |
|
|
10 |
|
|
$ |
866,031 |
|
|
$ |
0 |
|
|
$ |
125,000 |
|
|
$ |
866,031 |
|
Samuel D. Jimenez |
|
|
2 |
|
|
$ |
37,818 |
|
|
$ |
0 |
|
|
$ |
100,000 |
|
|
$ |
37,818 |
|
Randall S. Eslick |
|
|
5 |
|
|
$ |
139,608 |
|
|
$ |
0 |
|
|
$ |
100,000 |
|
|
$ |
139,608 |
|
Ted Cumming |
|
|
2 |
|
|
$ |
42,600 |
|
|
$ |
0 |
|
|
$ |
50,000 |
|
|
$ |
42,600 |
|
Page 33
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Registrant |
|
|
|
|
|
|
|
|
|
|
Contributions in |
|
Aggregate |
|
Aggregate |
|
Aggregate |
|
Vested Balance |
|
|
Last Fiscal Year |
|
Earnings in Last |
|
Withdrawals/ |
|
Balance at Last |
|
at Last Fiscal |
Name |
|
($) |
|
Fiscal Year ($) |
|
Distributions ($) |
|
Fiscal Year ($) |
|
Year |
|
Patrick J. Moty |
|
$ |
85,809 |
|
|
$ |
34,826 |
|
|
$ |
0 |
|
|
$ |
396,917 |
|
|
$ |
396,917 |
|
Linda J. Miles |
|
$ |
85,521 |
|
|
$ |
81,275 |
|
|
$ |
0 |
|
|
$ |
866,031 |
|
|
$ |
866,031 |
|
Samuel D. Jimenez |
|
$ |
16,539 |
|
|
$ |
2,883 |
|
|
$ |
0 |
|
|
$ |
37,818 |
|
|
$ |
37,818 |
|
Randall S. Eslick |
|
$ |
37,535 |
|
|
$ |
11,867 |
|
|
$ |
0 |
|
|
$ |
139,608 |
|
|
$ |
139,608 |
|
Ted Cumming |
|
$ |
19,768 |
|
|
$ |
3,127 |
|
|
$ |
0 |
|
|
$ |
42,600 |
|
|
$ |
42,600 |
|
The retirement benefit is derived from accruals to a benefit account during the participants
employment. At the end of the executives period of service, the aggregate amount accrued should
equal the then present value of the benefits expected to be paid to the executive. The participant
is entitled to all vested benefits in the case of termination without cause; however, if a
participant voluntarily resigns prior to reaching normal retirement age, his or her retirement
benefits are reduced by accrual amounts not yet funded. Upon a change of control, the participant
is entitled to the full retirement benefit.
Potential Payments upon Termination or Change in Control
No payments under employment agreements would have been payable at December 31, 2010 due to TARP
restrictions. The following table sets out the amounts that would have been payable to the named
executive officers at December 31, 2010 if the TARP rules did not apply: (a) upon a change of
control, and (b) as a result of termination other than termination arising from a change of
control, assuming in each case that the payments were made as a lump sum.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Payments Upon a |
|
Termination Other Than |
|
|
Change in Control |
|
Change in Control |
|
|
|
|
|
|
|
|
|
|
Payments under |
|
|
|
|
Payments under |
|
Salary |
|
employment |
|
Salary |
|
|
employment |
|
Continuation Plan |
|
agreements |
|
Continuation Plan |
Name |
|
agreements ($)(1) |
|
Payments ($)(2) |
|
($)(3) |
|
Payments ($)(4) |
|
Patrick J. Moty |
|
$ |
874,070 |
|
|
$ |
1,129,999 |
|
|
$ |
437,035 |
|
|
$ |
396,917 |
|
Linda J. Miles |
|
$ |
752,528 |
|
|
$ |
1,103,458 |
|
|
$ |
376,264 |
|
|
$ |
866,031 |
|
Samuel D. Jimenez |
|
$ |
205,882 |
|
|
$ |
617,871 |
|
|
$ |
205,882 |
|
|
$ |
37,818 |
|
Randall S. Eslick |
|
$ |
235,285 |
|
|
$ |
695,979 |
|
|
$ |
235,285 |
|
|
$ |
139,608 |
|
Ted Cumming |
|
$ |
186,602 |
|
|
$ |
549,784 |
|
|
$ |
186,602 |
|
|
$ |
42,600 |
|
|
|
|
1) |
|
Under employment agreements at a change of control, severance pay for the Chief Executive
Officer and Executive Vice President is equal to two years of most recent total compensation
package as of the date of such executives termination. Change of control, severance pay is equal
to one year of most recent total compensation package as of the date of such executives
termination. |
|
2) |
|
SERP payments are limited under IRS Section 280-G to three times the average total compensation
package. |
|
3) |
|
In the event employment is terminated determined for cause, the executive shall only be paid
any accrued salary calculated as of the date of the executives termination. In the event
employment is terminated for any other reason, the executive shall be entitled to twelve months of
such executives then total compensation package to be paid in a lump sum. |
|
4) |
|
Vested portion of salary continuation plan. |
Page 34
DIRECTOR COMPENSATION
The following is a summary of the compensation earned by the Companys Board of Directors during
the fiscal year ended December 31, 2010.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pension Value |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
and Non- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Qualified |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock |
|
|
Non-Equity |
|
|
Deferred |
|
|
All Other |
|
|
|
|
|
|
Fees earned |
|
|
Stock |
|
|
Option |
|
|
Incentive |
|
|
Compensation |
|
|
Compensation |
|
|
|
|
|
|
or paid in |
|
|
Awards |
|
|
Awards |
|
|
Compensation |
|
|
Earnings |
|
|
(Deferred) |
|
|
Total |
|
Director |
|
cash ($) |
|
|
($) |
|
|
($)(1) |
|
|
($) |
|
|
($)(2) |
|
|
($) |
|
|
($) |
|
|
Gary Burks |
|
$ |
17,000 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
17,000 |
|
Orin N. Bennett |
|
$ |
28,600 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
6,351 |
|
|
$ |
0 |
|
|
$ |
34,951 |
|
Russell L. Duclos |
|
$ |
28,200 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
23,868 |
|
|
$ |
0 |
|
|
$ |
52,068 |
|
Joseph Gibson |
|
$ |
15,300 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
359 |
|
|
$ |
0 |
|
|
$ |
15,659 |
|
Kenneth R. Gifford, Jr. |
|
$ |
39,250 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
31,452 |
|
|
$ |
0 |
|
|
$ |
70,702 |
|
Jon Halfhide |
|
$ |
18,050 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
4,478 |
|
|
$ |
0 |
|
|
$ |
22,528 |
|
David H. Scott |
|
$ |
31,550 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
15,075 |
|
|
$ |
0 |
|
|
$ |
46,625 |
|
Lyle L. Tullis |
|
$ |
20,950 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
11,827 |
|
|
$ |
0 |
|
|
$ |
32,777 |
|
|
|
|
1) |
|
The value of the stock option award is computed based upon the grant date fair value, consistent
with FASB ASC Topic 718. |
|
2) |
|
Long term directors have had the opportunity to defer fee income as of January 1, 1993. Item (2)
represents the interest paid on such balances. Differences in earnings are based upon the balances
in the deferred accounts. |
Annual Compensation
Compensation paid to non-employee directors consists of cash (in the form of a monthly retainer and
meeting fees) and equity (in the form of stock option grants) and participation in the Directors
Deferred Compensation Plan. The Compensation Committee is responsible for all matters related to
directors compensation in connection with reviewing and establishing or recommending to the Board
of Directors non-employee director compensation. Generally, the Compensation Committee will review
the amount of director compensation at least annually. For purposes of establishing director
compensation, the Compensation Committee evaluated directors compensation as compared to detailed
public company information provided by Equilar®, a leading marketer for benchmarking
executive compensation and a trusted data provider to NASDAQ. As a result of the benchmarking, our
director compensation fell in the 53rd percentile.
A director who is an officer/employee of the Company or of a subsidiary is not compensated for his
or her membership on the Board of Directors.
Monthly Retainer and Meeting Fees
Each independent director of the Company receives a $500 monthly retainer. Independent Directors
are paid $800 for each Board of Directors meeting attended and $250 for each committee meeting
attended. Committee chairpersons are paid an additional $50 per meeting. The Chairman of the Board
is paid an additional $750 per month and the Chairman of the Audit Committee is paid an additional
$375 per month.
Page 35
Equity Compensation
Independent directors are also eligible to participate in the 2008 Stock Option Plan, as determined
by the Compensation Committee. A non-employee director may receive a stock option at a discounted
exercise price per share equal to 85% of the closing price of one share of common stock as reported
on NASDAQ on the date of the meeting when the option is granted.
Directors Deferred Compensation Plan
The Directors Deferred Compensation Plan, adopted by the Board of Directors effective January 1,
1993 is a non-qualified director benefit plan in which the eligible director voluntarily elects to
defer some or all of his or her current fees in exchange for the Companys promise to pay a
deferred benefit. The deferred fees are credited with interest under the plan and the accrued
liability is paid to the director at retirement. The current interest rate on the plan is ten
percent.
As a non-qualified plan, the plan is only available to independent directors without regard to
nondiscrimination requirements of qualified plans. The account is segregated from other assets
owned by the Bank, only by way of its identification on the books of the Bank as a liability of the
Bank to the Director. The account is subject to claims of general creditors of the Bank and the
account shall be a general unsecured creditor of the Bank.
No deferred compensation shall be payable to a director until the death, disability, resignation,
retirement or removal from office of such director. Whereupon all such compensation, together with
interest thereon shall be provided to such director, or his beneficiary within thirty (30) days
from the date of death, disability, retirement or resignation. If the director has designated an
optional installment payment method, the first installment shall be paid after six months of his or
her normal retirement date.
Upon the death of a director, while serving in such capacity, distribution of compensation deferred
together with interest shall be made in one lump sum to his or her designated beneficiary. Upon the
death of a director who had previously retired and had elected an installment method of
distribution, all sums remaining undistributed shall be paid in one lump sum to his or her
designated beneficiary.
Deferred compensation by reason of the resignation or retirement, may at the option of the
director, be payable in approximately equal monthly installments over a period not to exceed
fifteen (15) years, provided however, that on any such installment method of distribution, interest
shall continue to be credited on the undistributed sums.
As of December 31, 2010 the Companys accrued obligations under the Directors Deferred Compensation
Plan were $2,934,607.
Directors and Officers liability insurance and Indemnification matters
The Companys bylaws provide for indemnification of the Companys directors, officers, employees
and other agents of the Company to the extent and under the circumstances permitted by the
California General Corporation Law. The Companys bylaws also provide that the Company shall have
the power to purchase and maintain insurance covering its directors, officers and employees against
any liability asserted against any of them and incurred by any of them, whether or not the Company
would have the power to indemnify them against such liability under the provisions of applicable
law or the provisions of the Companys bylaws.
Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be
permitted to directors, officers or persons controlling the Company pursuant to provisions in the
Companys bylaws, the Company understands that it is in a position of the Securities and Exchange
Commission (the SEC), that such indemnification is against public policy as expressed in the
Securities Act of 1933, and is therefore unenforceable.
Page 36
Compensation Committee Report
The Executive Compensation Committee is appointed by the Board of Directors to discharge its
responsibilities relating to compensation for the Companys directors and officers. The Executive
Compensation Committee has overall responsibility for approving and evaluating the director and
officer compensation plans, policies and programs of the Company. All actions taken by the
Executive Compensation Committee are ratified by the full Board of Directors of the Company.
The Executive Compensation Committee has the sole authority to retain and terminate any legal
counsel or compensation or other consultant to be used to assist in the evaluation of directors or
executive compensation and has sole authority to approve the consultants fees and other retention
terms. We have reviewed and discussed the foregoing Compensation Discussion and Analysis with
management. Based on our review and discussion with management, we have recommended to the Board of
Directors that the Compensation Discussion and Analysis be included in this Annual Report on Form
10-K for the year ended December 31, 2010.
In addition, in connection with its participation in the United States Department of Treasurys
Troubled Asset Relief Program Capital Purchase Program, the Executive Compensation Committee is
required to meet every six months with the Companys Chief Risk Officer or other senior risk
officers to discuss and review the relationship between the Companys risk management policies and
practices and its senior executive officer (SEO) incentive compensation arrangements, identifying
and making reasonable efforts to limit any features in such compensation arrangements that might
lead to the SEOs taking unnecessary or excessive risks that could threaten the value of the
Company. The Executive Compensation Committee, on behalf of the Company, must certify that it has
completed the review and taken any necessary actions. In addition, Treasury Guidance (TG-15),
issued February 4, 2009, requires that companies participating in a generally available capital
program explain why compensation arrangements do not encourage excessive and unnecessary
risk-taking.
In response to this requirement, on November 16, 2010 the Compensation Committee met with Robert
Oberg, who has been identified by the Board as the Companys Chief acting Risk Officer. The Chief
Risk Officer presented the Executive Compensation Committee with an overview of the Companys
overall risk structure and the top risks identified within the Company, and discussed the process
by which he had analyzed the risks associated with the executive compensation program. This process
included, among other things, a comprehensive review of the program and discussions with senior
Human Resources personnel of the Company. Incentive compensation is measured and paid to each SEO
based on both the Companys performance and individual performance. In assessing the officers
total awards, the Executive Compensation Committee reviews each component of an officers
compensation and considers and evaluates pay mix, the competitive market, the value of total pay,
benefits and perquisites.
These reviews are recorded in a survey format. The Companys Chief Risk Officer has reviewed the
Executive Compensation Committee surveys and concluded that the Companys incentive compensation
plan does not significantly incent SEOs to take excessive or unnecessary risk that may
significantly result in a material devaluation of the Company. In general, the committees
responses suggest that the Companys overall executive compensation incentives pose a low risk to
the devaluation of the Company. The responses also suggest that, in the committees opinion, the
Companys long-term incentives tend to result in a medium level of credit risk. A medium level of
risk, particularly credit risk, is to be expected as typical of all financial institutions whose
value is dependent upon the taking of risk.
The Executive Compensation Committee reviewed with the Chief Risk Officer the structure of the
Companys overall executive compensation program. This review included, without limitation, the
upside and downside compensation potential under the Companys annual incentive plans; the
long-term view encouraged by the design and vesting features of the Companys long-term incentive
arrangements; and the extent to which the Executive Compensation Committee and the Companys
management monitor the program. Based on its analysis of these and other factors, the Executive
Compensation Committee determined that the Companys executive compensation program does not
encourage the SEOs to take unnecessary and excessive risks that threaten the value of the Company,
and that no changes to the program were required for this purpose.
Page 37
The required certification of the Executive Compensation Committee is provided in the Compensation
and Human Resources Committee Report set forth following this Compensation Discussion and Analysis.
April 8, 2011
Respectfully submitted by the members of the Executive Compensation Committee,
Jon Halfhide, Chairman of the Executive Compensation Committee
Orin Bennett
Gary Burks
Kenneth R. Gifford, Jr.
Page 38
REPORT OF THE AUDIT AND QUALIFIED LEGAL COMPLIANCE COMMITTEE
The Audit and Qualified Legal Compliance Committee (Audit Committee) is responsible for the
appointment, compensation, and oversight of the work of the Companys independent accountants. The
Committee pre-approves on an annual basis services that are of a recurring nature. The Committee
must pre-approve any scope changes resulting in fee increase.
In accordance with its written charter adopted by the Board of Directors (Board), a copy of which
is included as an appendix to this proxy statement, the Audit Committee of the Board assists the
board in fulfilling its responsibility for oversight of the quality and integrity of the
accounting, auditing, and reporting practices of the Company and other such duties as directed by
the board. The membership of the Audit Committee consists of at least three directors who are
generally knowledgeable in financial and auditing matters, including at least one member with
accounting or related financial management expertise. Each member of the Audit Committee is free of
any relationship that, in the opinion of the board, would interfere with his or her individual
exercise of independent judgment, and meets the director independence requirements for serving on
Audit Committees as set forth in the corporate governance standards of the NASDAQ Global Market.
During 2010, the Audit Committee met six times. An executive session excluding management preceded
each of the meetings. The Chairman of the Audit Committee reviewed the financial information
contained in each of the quarterly press announcements and SEC Form 10-Q and 10-K filings with the
Chief Executive Officer, Chief Financial Officer and independent accountants before public release.
In addition the committee actively participated in the control documentation work being performed
by the Sarbanes-Oxley 404 Committee (SOX 404).
The Company considers all outside auditing consultants to be independent accountants. In
discharging its oversight responsibility with respect to the Audit process, the Committee obtained
from the independent accountants a formal written statement describing all relationships between
the accountants and the Company that might bear on the accountants independence consistent with
Independence Standards Board Standard No. 1, Independence Discussions with Audit Committees,
discussed with the accountants any relationships that may impact their objectivity and independence
and satisfied itself as to the auditors independence. The Audit Committee also discussed with
management and the independent accountants the quality and adequacy of the Companys internal
controls and the outsourced audit functions, responsibilities, budget and staffing. The Audit
Committee reviewed with the independent accountants their audit plans, audit scope and
identification of audit risks.
The Audit Committee discussed and reviewed with the independent accountants all communications
required by auditing standards generally accepted in the United States of America, including those
described in Statement on Auditing Standards No. 61, as amended, Communication with Audit
Committees, (SAS 61) and discussed and reviewed the results of the independent auditors audit
of the financial statements. The SAS 61 communications referred to above includes matters such as
significant adjustments, management judgments and accounting estimates, significant new accounting
policies, and disagreements with management. SAS 61 was amended in the year 2000, by Statement on
Auditing Standards No. 90, Audit Committee Communications, to require discussion of the independent
auditors judgments about quality, not just the acceptability of the companys accounting
principles. SAS 61 was also amended by Statement on Auditing Standards No. 89, Audit Adjustments,
to require the auditor to inform the audit committee about any uncorrected misstatements pertaining
to the current period whose effects management believes are immaterial to the financial statements
taken as a whole.
The Audit Committee also discussed the results of all internal audit examinations.
The Audit Committee reviewed the audited financial statements of the company as of and for the year
ended December 31, 2010, with management and the independent accountants. Management has the
responsibility for the preparation of the Companys financial statements and the overall reporting
process, for maintaining adequate internal control over financial reporting for the Company, and
for assessing the effectiveness of the Companys internal control over financial reporting.
Page 39
The independent accountants are responsible for performing independent audits of the Companys
consolidated financial statements. These audits serve as a basis for the accountants opinions
included in the annual report to stockholders addressing whether the financial statements fairly
present the Companys financial position, results of operations, and cash flows in conformity with
generally accepted accounting principles in the United States. The Committees responsibility is to
monitor and oversee these processes.
Based on the above-mentioned review and discussions with management and the independent
accountants, the Audit Committee recommended to the Board that Bank of Commerce Holdings audited
financial statements be included in its annual Report on Form 10-K for the year ended December 31,
2010, for filing with the Securities and Exchange Commission.
Principal Accounting Firm fees
Audit Fees
The aggregate fees billed by Moss Adams LLP, for professional services rendered for the audit of
the Companys annual financial statements for the fiscal years ended December 31, 2010 and 2009,
and for the reviews of the financial statements included in the Companys Quarterly Reports on Form
10-Q for those fiscal years were $180,995 and $197,636, respectively.
Audit-Related Fees
Moss Adams LLP, did not render any professional services for information technology services
relating to financial information systems design and implementation for the fiscal years ended
December 31, 2010, and December 31, 2009.
Tax Fees
Moss Adams LLP, did not render any professional services for tax compliance, tax advice, or tax
planning during 2010 or 2009. Tax fees paid in 2010 were approximately $12,500 and approximately
$9,500 in 2009.
All Other Fees
The aggregate fees billed by Moss Adams LLP. for services rendered to the Company, other that the
services described under Audit Fees and Audit-Related Fees and tax fees amount to $0 and $0 for
the fiscal years December 31, 2010 and 2009, respectively.
In discharging its oversight responsibility with respect to the audit process, the Audit Committee
of the Board of Directors obtained from the independent accountants a formal written statement
describing all relationships between the accountants and the Company that might bear on the
accountants independence consistent with Independence Standards Board Standard No.1, Independence
Discussions with Audit Committees, discussed with the accountants any relationships that may
impact their objectivity and independence and satisfied itself as to the accountants independence.
The Committee also discussed with management and the independent accountants the quality and
adequacy of Bank of Commerce Holdings internal controls and the outsourced audit functions,
responsibilities, budgeting and staffing. The Committee reviewed with the independent accountants
their audit plans, audit scope and identification of audit risks.
Page 40
Pre-approval Policies and Procedures
Under the audit committees pre-approval policies and procedures, the audit committee is required
to pre-approve the audit and non-audit services performed by the Companys independent registered
public accounting firm. The audit committee may pre-approve a list of services that may be provided
by the independent registered public accounting firm without obtaining specific pre-approval from
the audit committee.
This list of services includes: audit services, audit-related services, tax services and all other
services. The audit committee sets pre-approved fee levels for each of these listed services. Any
type of service that is not included on the list of pre-approved services must be specifically
approved by the audit committee. Any proposed service that will fall outside of the pre-approved
fee levels will also require specific pre-approval by the audit committee.
All above fees paid to Moss Adams, LLP during 2010 were pre-approved by the audit committee.
Respectfully submitted by the members of the Audit and Qualified Legal Compliance Committee,
|
|
|
David H. Scott, CPA
|
|
Chairman Audit and Qualified Legal Compliance Committee |
|
Russell L. Duclos |
|
|
Kenneth R. Gifford, Jr. |
|
|
Lyle L. Tullis |
|
|
Jon Halfhide, CPA |
|
|
Kenneth R. Gifford, Jr. |
|
|
Page 41
Discussion of proposals recommended by the Board of Directors
Proposal 1
Election of Directors
The Board of Directors has nominated the persons identified in the Board of Directors section above
for election at the Annual Meeting. If you elect them, they will hold office until the election of
their successors at the Annual Meeting in 2012, or until they resign.
We know of no reason why any nominee may be unable to serve as a director. If any nominee is unable
to serve, your proxy may vote for another nominee proposed by the Board of Directors. If for any
reason these nominees prove unable or unwilling to stand for election, the Board will nominate
alternatives. The Board of Directors has no reason to believe that its nominees would prove unable
to serve if elected.
The Board of Directors recommends a vote FOR the election of each of the nominees for director.
PROPOSAL 2
The Board of Directors recommends a vote FOR the ratification of Moss Adams, LLP as the Companys
independent accountants for the year ended December 31, 2010
The Audit Committee has selected Moss Adams, LLP as the independent registered public accounting
firm to audit the books of the Company and its subsidiaries for the year ending December 31, 2010,
to report on the consolidated statement of financial position and related statement of earnings of
the Company and its subsidiaries, and to perform other appropriate accounting services as may be
required by the Board of Directors. The Board recommends that the stockholders vote in favor of
ratifying the selection of Moss Adams, LLP for the purposes set forth above. If the stockholders do
not ratify the selection of Moss Adams, LLP, the Audit Committee will consider a change in
accountants for the next year.
Moss Adams, LLP has advised the Company that they are independent accountants with respect to the
Company and within the meaning of standards established by the American Institute of Certified
Public Accountants, the Public Company Accounting Oversight Board, the Independence Standards Board
and federal securities laws administered by the SEC. The Company does not expect that
representatives of Moss Adams LLP will be present at the Annual Meeting and accordingly shall not
be available to answer questions or make a statement.
PROPOSAL 3
The Board of Directors recommends a vote FOR the adoption of the non-binding advisory resolution
approving the compensation of the named executives.
As a result of the Companys participation in the Capital Purchase Program, the ARRA requires the
Company to submit to the shareholders a non-binding vote on the compensation of the Companys named
executive officers, as described in the Compensation Discussion and Analysis, the tabular
disclosure regarding named executive officer compensation, and the accompanying narrative
disclosure in this proxy statement.
This proposal, commonly known as a say-on-pay proposal, gives the Companys shareholders the
opportunity to endorse or not endorse the Companys executive pay program and policies through the
following resolution:
Resolved, that the shareholders approve the compensation of the named executive officers, as
disclosed in the Compensation Discussion and Analysis, the compensation tables, and related
material in this proxy statement.
This vote shall not be binding on the board of directors and will not be construed as overruling a
decision by the board nor create or imply any additional fiduciary duty by the board. However, the
Compensation Committee will take into account the outcome of the vote when considering future
executive compensation arrangements.
This matter will be decided by the affirmative vote of a majority of the votes cast at the annual
meeting. On this matter, abstentions will have no effect on the voting.
Page 42
OTHER BUSINESS
Under the Rules of the SEC, if a shareholder wants to include a proposal in the Companys Proxy
Statement and form of proxy for presentation at the Companys 2012 Annual Meeting of Shareholders,
the proposal must be received by the Company at its principal administrative office located at 1951
Churn Creek Road, Redding, California by November 20, 2011.
Under the Companys bylaws, as permitted by the SEC, certain procedures are provided which a
shareholder must follow to nominate persons for election as directors or to introduce an item of
business at an annual meeting of shareholders.
Nomination of directors must be made by notification in writing delivered or mailed to the
President of the Company at the Companys principal administrative office not less than 30 days or
more than 60 days prior to any meeting of shareholders called for election of directors. The
Companys annual meeting of shareholders is generally held on the third Tuesday of May. If the
Companys 2012 Annual Meeting of Shareholders is held on schedule, the Company must receive notice
of any nomination no earlier than March 19, 2012, and no later than April 19, 2012. The Chairman of
the meeting may refuse to acknowledge the nomination of any person not made in compliance with the
foregoing procedures.
If the Chairman of the meeting acknowledges the nomination of a person not made in compliance with
the foregoing procedures, the persons named as proxies in the proxy materials relating to that
meeting will use their discretion in voting the proxies when the nomination is made at the meeting.
Notice of any business item proposed to be brought before an annual meeting by a shareholder must
be received by the Secretary of the Company not less than 70 days or more than 90 days before the
annual meeting. If the Companys 2012 Annual Meeting of Shareholders is held on schedule, the
Company must receive notice of any proposed business item no earlier than February 20, 2012, and no
later than March 10, 2012.
If the Company does not receive timely notice, the Companys bylaws preclude consideration of the
business item at the annual meeting. The Companys bylaws also provide that notices regarding
nomination of directors must contain certain information about the director nominee.
With respect to notice of a proposed item of business, the bylaws provide that the notice must
include a brief description of the business desired to be brought before the meeting, the reasons
for conducting such business at the meeting and certain information regarding the shareholder
giving the notice. Shareholders may obtain a copy of the Companys bylaws by sending a written
request to the Secretary of the Company at the Companys principal executive offices. Shareholders
may contact an individual director, the Board of Directors as a group, or a specified committee or
group, at the Companys headquarters address. Each communication should specify the applicable
addressee or addressees to be contacted as well as the general topic of the communication.
Page 43
The Company will initially receive and process communications before forwarding them to the
addressee.
The Company generally will not forward to the directors a shareholder communication that it
determines to be primarily commercial in nature or relates to an improper or irrelevant topic, or
that requests general information about the Company. The Company knows of no other business that
will be presented at the Annual Meeting. If any other business is properly brought before the
Annual Meeting, it is intended that proxies in the enclosed form will be voted in accordance with
the judgment of the persons voting the proxies. Whether or not you intend to be present at the
Annual Meeting, we request you to return your signed proxy promptly.
By Order of the Board of Directors
David H. Scott
Corporate Secretary
Redding, California
April 08, 2011
Page 44
Appendix A
Bank of Commerce Holdings
Audit Committee and Qualified Legal Compliance Committee Charter
Purpose
It is the policy of the Board of Directors that a system of internal controls be maintained
sufficient to provide reasonable assurance that assets are safeguarded, transactions are properly
authorized and recorded, and reasonable, detailed records are maintained which accurately reflect
the Companys financial activities and overall risk profile.
It is the policy of the Board of Directors that results from examinations and audits conducted by
Regulatory Agencies such as the Department of Financial Institutions, Federal Reserve Board and the
FDIC are fully disclosed to the Board of Directors. Further, it is Board policy that at least three
representatives from the Board of Directors will be included in any exit review conducted by
regulatory personnel with the management of the Company.
It is therefore the objective of the Audit Committee is to assist the Board of Directors in
fulfilling its fiduciary responsibilities by overseeing the Audit and Risk Management functions of
the Company.
Specifically, the Audit Committee is appointed by the Board of Directors to assist in monitoring
(1) the integrity of the financial statements of the Company, (2) the independent auditors
qualifications and independence, (3) the performance of the Companys audit functions, (4)
compliance by the Company with legal and regulatory requirements, and (5) the Companys risk
management efforts.
The Audit Committee shall also be responsible for the preparation of all reports required by the
rules of the Securities and Exchange Commission to be included in the Companys annual proxy
statement.
In fulfillment of its responsibilities, the Audit Committee shall make regular reports to the Board
of Directors. The Audit Committee shall review and reassess the adequacy of this Charter annually
and recommend any proposed changes to the Board of Directors for approval. The Audit Committee
shall annually review the Committees own performance.
While the Audit Committee has the responsibilities and powers set forth in this charter, it is
reinforced that such duties include the oversight, scheduling and review of such work and it is not
the duty of the Audit Committee to conduct audits or to determine whether the Companys financial
statements and disclosures are complete and accurate and are in accordance with generally accepted
accounting principles and applicable rules and regulations. These are the responsibilities of
management and the independent auditor.
Membership
The Board of Directors shall appoint the Audit Committee financial expert as chairperson. In
addition to the professional requirements, this person plays a pivotal role in Audit Committee
effectiveness. He or she will be responsible for the leadership of the committee, including
preparing the agenda, presiding over meetings, making committee assignments, and reporting to the
Board of Directors. The chairperson will also maintain regular liaison with the President, Chief
Risk Officer, Chief Financial Officer, and the lead Independent Audit Partner.
The membership of the committee shall consist of at least three directors who are generally
knowledgeable in financial and auditing matters, including at least one member with accounting or
related financial management expertise construed to be a financial expert. By definition, the audit
committee financial expert is an individual who is determined by the board of directors to possess
all of the following attributes:
|
|
|
An understanding of financial statements and generally accepted accounting principles
(GAAP) |
|
|
|
|
An ability to assess the general application of such principles in connection with the
accounting for estimates, accruals and reserves |
Page 45
|
|
|
Experience preparing, auditing, analyzing, or evaluating financial statements that
present a breadth and level of complexity of accounting issues generally comparable to
what can be expected to be raised by the Companys financial statements, or experience
actively supervising one or more persons engaged in such activities |
|
|
|
|
An understanding of internal controls and procedures for financial reporting |
|
|
|
|
An understanding of audit committee functions |
|
|
|
|
A fundamental understanding of Risk Management processes and best practices,
commensurate with the size and complexity of the Company. |
The final rule for audit committee financial experts indicates that the attributes may be acquired
by:
|
|
|
Education and experience as a principal financial officer, principal accounting
officer, controller, public accountant, or auditor, or experience in one or more positions
that involve the performance of similar functions |
|
|
|
|
Experience actively supervising a principal financial officer, controller, public
accountant, auditor, or person performing similar functions, or experience overseeing or
assessing the performance of companies or public accountants with respect to the
preparation, auditing, or evaluation of financial statements. |
The members of the Audit Committee shall meet the independence and experience requirements of the
NASDAQ National Market stock exchange, Section 10A(m)(3) of the Securities and Exchange Commission
Act of 1934 and the rules and regulations of the commission. Each member shall be free of any
relationship that, in the opinion of the board, would interfere with his or her individual exercise
of independent judgment, and shall meet the director independence requirements for serving as set
forth in the corporate governance standards of the NASDAQ.
The committee is expected to maintain free and open communication (including private executive
sessions at each meeting) with the independent accountants, the Chief Risk Officer, and senior
management of the Company. The Audit Committee shall have the authority, to the extent it deems
necessary or appropriate, to retain independent legal, accounting or other advisors. The Company
shall provide for appropriate funding, as determined by the Audit Committee, for payment of
compensation to the independent auditor for the purpose of rendering or issuing an audit report and
to any advisors employed by the Audit Committee.
Oversight Responsibilities
To discharge its duties regarding the oversight of Financial Statements and disclosure matters the
Audit Committee shall:
|
|
|
Review and discuss with management and the independent auditor the annual audited
financial statements, including disclosures made in managements discussion and analysis,
and approve the filing of such documents with the SEC. Recommend the acceptance of the
annual audited financial statements at the annual Directors examination. |
|
|
|
|
Review and discuss with management and the independent auditor the Companys quarterly
financial statements prior to the filing of its Form 10-Q, including the results of the
independent auditors review of the quarterly financial statements. |
|
|
|
|
Discuss with management and the independent auditor significant financial reporting
issues and judgments made in connection with the preparation of the Companys financial
statements, including any significant changes in the Companys selection or application of
financial principles, any major issues as to the adequacy of the Companys internal
controls and any special steps adopted in light of material control deficiencies. |
Page 46
|
|
|
Discuss with management the Companys earnings press releases, including the use of
pro forma or adjusted non-GAAP information, as well as financial information and
earnings guidance provided to analysts and rating agencies. Such discussion may be done
generally (consisting of discussing the types of information to be disclosed and the types
of presentations to be made.) |
|
|
|
|
Discuss with management and the independent auditor the effect of regulatory and
accounting initiatives as well as off-balance sheet structures on the Companys financial
statements. |
|
|
|
|
Discuss with management the Companys major financial risk exposures and the steps
management has taken to monitor and control such exposures, including the Companys risk
assessment and risk management policies. |
|
|
|
|
Discuss with the Independent auditor the matters required to be discussed by Statement
on Auditing Standards No. 61 relating to the conduct of the audit, including any
difficulties encountered in the course of the audit work, any restrictions on the scope of
activities or access to requested information, and any significant disagreements with
management. |
|
|
|
|
Review disclosures made to the Audit Committee by the Companys CEO and CFO during the
certification process for the Form 10-K and Form 10-Q about any significant deficiencies
in the design or operation of internal controls or material weaknesses therein and any
fraud involving management or other employees who have a significant role in the Companys
internal controls. |
|
|
|
|
Oversee managements annual assessment of, and report on, the companys internal
control over financial reporting including the Companys Sarbanes-Oxley program. |
Oversight of the Companys Independent Audit Function
It is the policy of the Board of Directors to engage a qualified certified public accounting firm
to conduct a full audit of financial statements at least once annually. This will constitute the
annual Director examination. Credit quality reviews, Compliance reviews, and Operational reviews
are regularly scheduled to support the audit and may be performed by parties other than the
certified public accounting firm selected to conduct the financial statement audit.
|
|
|
The Audit Committee shall have the sole authority to appoint or replace the independent
auditor (subject, if available, to shareholder ratification.) In doing so, the committee
will request from the auditor a written affirmation that the auditor is in fact
independent, discuss with the auditor any relationships that may impact the auditors
independence, and recommend to the board any actions necessary to oversee the auditors
independence. |
|
|
|
|
Overseeing the independent auditor relationship by discussing with the auditor the
nature and rigor of the audit process, receiving and reviewing audit reports, and
providing the auditor full access to the committee (and the board) to report on any and
all appropriate matters. |
|
|
|
|
The Audit Committee shall be directly responsible for the compensation and oversight of
the work of the independent auditor (including resolution of disagreements between
management and the independent auditor regarding financial reporting) for the purpose of
preparing or issuing an audit report or related work. The independent auditor shall report
directly to the Audit Committee. |
|
|
|
|
The Audit Committee shall pre-approve all auditing services and permitted non-audit
services (including the fees and terms) to be performed for the Company by its independent
auditor. |
|
|
|
|
The Audit Committee shall oversee managements annual assessment of, and report on, the
companys internal control over financial reporting. |
|
|
|
|
The Audit Committee shall review and evaluate the lead partner of the independent audit
team. |
Page 47
|
|
|
The Audit Committee shall obtain and review a report from the independent auditor, at
least annually regarding (a) the independent auditors internal quality-control
procedures, (b) any material issues raised by the most recent internal quality-control
review, or peer review of the firm, or by any inquiry or investigation by governmental or
professional authorities within the preceding five years respecting one or more
independent audits carried out by the firm, (c) any steps taken to deal with any such
issues, and (d) all relationships between the independent auditor and the Company. The
Audit Committee shall present its conclusions with respect to the independent auditor to
the Board of Directors. |
|
|
|
|
The Audit Committee shall ensure the rotation of the audit partners as required by law.
Consider whether, in order to assure continuing auditor independence, it is appropriate to
adopt a policy of rotating the independent auditing firm on a regular basis. |
|
|
|
|
The Audit Committee shall prohibit the Companys internal and independent auditors, as
well as the Companys supervisory regulators from acting as a director, officer, employee
or consultant of the Company, or performing any decision-making, supervisory, or ongoing
monitoring function for the Company for a cooling off period of two years from the date of
engagement. |
Oversight of the Companys Internal Audit Function
The Board of Directors may elect to have an outside audit firm perform audits of operational and
compliance policies and procedures and conduce an independent loan review for credit quality,
compliance, documentation and appropriate grading.
Although outside consultants, these auditors will be considered our In-house auditors. The Chief
Risk Officer will outline the scope of the internal audits on an annual basis, and will communicate
the scope with the Audit Committee. In-house auditors will be managed by the Chief Risk Officer.
The Audit Committee shall:
|
|
|
Review all significant reports to management prepared by the internal auditor and
managements response. |
|
|
|
|
Discuss with the independent auditor and/or the Chief Risk Officer, the internal audit
responsibilities, budgeting, staffing, and scheduling of audits and any recommended
changes in the planned scope of the internal audit. |
Oversight of the Companys Risk Management Function
The Audit Committee, with the Chief Risk Officer, assists the Board of Directors in overseeing the
Companys policies, procedures, and practices relating to the Companys enterprise-wide risks. The
Audit Committee also oversees the Companys compliance with applicable laws and regulations, and
reviews all regulatory findings directed to the Boards attention, assesses the adequacy of
managements response to all material regulatory findings, and monitors compliance with
managements response. In addition, the Audit Committee oversees material pending litigation and
monitors whether material new initiatives have been appropriately analyzed and approved.
|
|
|
The Audit Committee shall review the appointment and replacement of the Chief Risk
Officer. The Audit Committee shall also, with the assistance of Executive Management,
review and approve the Chief Risk Officers performance evaluations and the departments
budget and resource needs. |
|
|
|
|
The Audit Committee shall obtain reports from the Chief Risk Officer that the Company
and its affiliated entities are in compliance with applicable laws, rules, regulations,
policies, procedures, and generally accepted best practices. |
|
|
|
|
The Audit Committee shall review Risk Management reports and disclosures to management
and managements responses. The Committee shall also advise the Board of Directors of the
effectiveness of the Companys Risk Management Program. |
Page 48
|
|
|
The Audit Committee shall establish procedures for the receipt, retention and treatment
of complaints received by the Company regarding accounting, internal accounting controls
or auditing matters, and the confidential, anonymous submission by employees of concerns
regarding questionable accounting or auditing matters. |
|
|
|
|
The Audit Committee shall ensure that management is monitoring the financial
performance and potential business continuity impact of key vendors, suppliers, insurers,
partners, banks, underwriters, counterparties, and other key third parties upon which the
Company relies. |
|
|
|
|
The Audit Committee shall discuss with management and the independent auditor any
correspondence with regulators or governmental agencies and any published reports which
raise material issues regarding the Companys financial statements or accounting policies. |
|
|
|
|
The Audit Committee shall discuss with the Companys counsel legal matters that may
have a material impact on the financial statements or the Companys compliance policies. |
|
|
|
|
The Audit Committee shall conduct such meetings with management as the Committee deems
appropriate, to discuss significant risk exposures facing the Company, the Companys
overall risk profile, and to discuss the steps that management has taken to monitor and
control such exposures, including the Companys guidelines and policies governing risk
assessment and risk management. |
|
|
|
|
The Audit Committee shall oversee the Companys performance on commitments made by
management in the course of regulatory examinations, make recommendations and monitor the
Companys compliance with the Committees recommendations. |
Page 49
Appendix B
Bank of Commerce Holdings
Nominating and Corporate Governance Committee Charter
Committee mission statement
The Committee acts on behalf of the RBC Board of Directors in the best interests of the Corporation
and its shareholders with regard to the identification of individuals qualified to become Board
members, selecting or recommending to the Board that the Board select the director nominees,
including for the next annual meeting of shareholders, and providing guidance on board and
corporate governance issues including recommending to the Board corporate governance guidelines
applicable to the Corporation.
Organization
Members of the Committee are appointed by and serve at the pleasure of the Board of Directors. The
members of the Nominating and Corporate Governance Committee shall be independent directors as
determined in accordance with the laws, rules and regulations of the NASDAQ Global Market and shall
also comply with and satisfy all other applicable laws, rules, regulations and requirements. The
Chairman of the Nominating and Corporate Governance Committee shall be elected annually by the
Board of Directors.
The Committee shall conduct and review with the Board of Directors annually an evaluation of the
committees performance with respect to the requirements of this Nominating and Corporate
Governance Charter.
The Committee shall have sole authority to employ professional advisers in fulfilling its duties.
Advisers include, but are not limited to, search professionals, compensation consultants, and
attorneys. The Committee shall have sole authority to approve fees, establish retention terms, and
terminate such advisers.
Purpose
The purpose of the Nominating and Corporate Governance Committee is to 1) identify individuals
qualified to serve on the Board of Directors and to recommend that the Board of Directors select
director nominees to be considered at the Companys next annual meeting of shareholders or to be
appointed by the Board of Directors to fill an existing or newly created vacancy on the Board of
Directors, 2) identify members of the Board of Directors to serve on each board committee and to
serve as chairman thereof and recommend each such member and chairman to the Board of Directors, 3)
develop and revise as appropriate Corporate Governance Guidelines applicable to the Company and
recommend such guidelines to the Board of Directors, 4) oversee managements annual assessment of,
and report on, the companys internal control over financial reporting, 5) oversee the evaluation
by the Board of Directors of itself and its committees, 6) identify individuals to serve as
executive officers of the Company and recommend such individuals to the Board of Directors and 6)
review with the Chief Executive Officer matters of management succession.
Meetings
The Nominating and Corporate Governance Committee shall meet as often as it deems necessary or
appropriate to carry out its responsibilities, no less than annually, and may, in its sole
discretion, form and delegate authority to subcommittees (comprised only of Nominating and
Corporate Governance Committee members) in furtherance of such responsibilities. Meetings of the
Nominating and Corporate Governance Committee shall be called by the Chairman of the Nominating and
Corporate Governance Committee or the Chairman of the Board. All such meetings shall be held
pursuant to the by-laws of the Company with regard to notice and waiver thereof, and written
minutes of each such meeting shall be duly filed in the Companys records.
Powers and Responsibilities
The Nominating and Corporate Governance Committee shall:
|
|
|
Actively seek to identify individuals qualified to serve on the Board of Directors and
to recommend that the Board of Directors select director nominees to be considered for
election at the Companys next annual meeting of shareholders or to be appointed by the
Board of Directors to fill an existing or |
Page 50
|
|
|
newly created vacancy on the Board of Directors in accordance with Board membership
criteria set forth in the Companys corporate governance guidelines. The Committee shall
also consider written proposals for director nominees received from shareholders in
accordance with the Companys corporate governance guidelines and by-laws. |
|
|
|
The Committee shall develop specific criteria to define what minimum qualifications are
required to serve on the Board of Directors. |
|
|
|
|
Identify qualified members of the Board of Directors to serve on each board committee
and to serve as chairman thereof and recommend each such member and chairman to the Board
of Directors. In addition, the Nominating and Corporate Governance Committee may designate
a member of such committee to attend the meetings of any other Board committee ex-officio
with the concurrence of the chairman of such other committee. |
|
|
|
|
Develop corporate governance guidelines applicable to the Company and recommend such
guidelines or revisions of such guidelines to the Board of Directors. All guidelines shall
be reviewed at least annually. |
|
|
|
|
Review at least annually, the nominating and corporate governance charter and executive
compensation charter of the Board of Directors and, when necessary or appropriate,
recommend changes in such charters to the Board of Directors. |
|
|
|
|
Conduct the annual peer review of the Board of Directors, itself, and its committees. |
|
|
|
|
Review with the Chief Executive Officer matters relating to management succession. |
|
|
|
|
Identify individuals to serve as executive or corporate officers of the Company and
recommend such individuals to the Board of Directors. |
|
|
|
|
Monitor the development of best practices regarding corporate governance and take a
leadership role in shaping the corporate governance of the Company. |
Page 51
Appendix C
Bank of Commerce Holdings
Executive Compensation Committee Charter
General
The Executive Compensation Committee (the Committee) shall be appointed by the Board of Directors
(the Board) of Bank of Commerce Holdings. (the Company). The primary function of the Committee
is to discharge the responsibilities of the Board relating to compensation of the Companys
Executive Officers (i.e. CEO, COO and CFO) and directors who are not employees of the Company, and,
in connection with the Companys benefits plans (e.g., stock option and bonus plans). The Committee
shall have all authority necessary to fulfill the duties and responsibilities assigned to the
Committee in this Charter or otherwise assigned to it by the Board.
Composition and Delegation
The Committee shall be composed of at least three members. Each member of the Committee shall be a
member of the Board and shall (i) meet the independence requirements established by the Board and
applicable laws, regulations and listing requirements, (ii) be a non-employee director within the
meaning of Rule 16b-3 under the Securities Exchange Act of 1934, and (iii) be an outside director
within the meaning of Section 162(m) of the Internal Revenue Code. The members of the Committee
shall be appointed annually by the Board or as necessary to fill vacancies in the interim. The
Board shall designate one of the Committee members as Chairperson. The Board may remove any member
from the Committee at any time with or without cause. The Committee, when appropriate, may form and
delegate authority to subcommittees and, to the extent permitted by applicable law, regulations and
listing standards, may delegate authority to one or more designated members of the Committee, the
Board or Company officers.
The Committee shall have the sole authority to engage or terminate any outside consultant that is
retained to assist the Committee in the evaluation of Executive Officers and directors
compensation, including the sole authority to approve fees and other retention terms. As the
Committee deems appropriate, it may also retain independent counsel and other professionals to
assist the Committee without seeking Board approval with respect to the selection, fees or
retention terms for any such advisers.
Duties and Responsibilities
Compensation Philosophy and Goal
|
|
Develop the Companys executive compensation philosophy and establish and semi-annually
review and approve policies regarding executive compensation programs and practices. |
CEO and Executive Officer Compensation
|
|
Review, solicit input from the entire Board and approve corporate goals and objectives
relevant to the Chief Executive Officers compensation and, at a meeting at which the Chief
Executive Officer is not present, evaluate the Chief Executive Officers performance in light
of those goals and objectives and determine the Chief Executive Officers compensation based
on this evaluation. In determining the long-term incentive component of Chief Executive
Officer compensation; the Committee will consider the Companys performance and relative
shareholder return, the value of similar incentive awards to chief executive officers at
comparable companies, the awards given to the Chief Executive Officer in past years and any
other factors that the Committee deems relevant. |
|
|
|
Review the Chief Executive Officers recommendations, if any, and determine annual
compensation for the Companys other Executives and Officers. |
|
|
|
Establish and administer annual and long-term incentive compensation plans for Executive
Officers. |
|
|
|
Recommend to the Board for its approval and, when appropriate, submission to the Companys
shareholders, incentive compensation plans and equity-based plans. |
Page 52
|
|
Recommend to the Board for its approval changes to Executive Officer compensation policies
and programs. |
|
|
|
Review and approve all Executive Officer employment, compensation and retirement
arrangements. |
|
|
|
Determine procedures for Board review of, and for communicating such review to, the Chief
Executive Officer and other senior management. |
|
|
|
The Compensation Committee will present compensation recommendations to the Board of
Directors and the Board of Directors will vote to either accept or reject compensation
recommendations. |
|
|
|
To take such actions as are required to ensure Company compliance with the provisions of
the Capital Purchase Program and the American Relief and Recovery Act (ARRA). |
Board Compensation
|
|
Periodically review director compensation practices in relation to comparable companies. |
|
|
|
Recommend to Board, as appropriate, revisions to director compensation practices. |
General Compensation and Benefits Matters
|
|
Consult periodically with the Chief Executive Officer regarding compensation and benefit
matters deemed appropriate by them or the members of the Committee. |
|
|
|
Provide oversight regarding the Companys retirement, welfare and other benefit plans,
policies and arrangements on an as-needed basis. |
Tax-Qualified & Nonqualified Benefit Plans
|
|
Recommend to the Board for Board action (i) all Internal Revenue Service tax-qualified
retirement plans and all plan amendments that are non-administrative in nature and (ii) all
nonqualified benefit plans and all plan amendments that are non-administrative in nature. |
|
|
|
Approve and recommend to the Board for its action: the designation of the trustee and the
execution of trust agreements for any such plan of plans; the termination, merger or
consolidation of any such plan or plans; and the extension of plan participation to employees
of affiliates or subsidiaries. |
|
|
|
Periodically review plan administration, participation and regulatory compliance of
nonqualified plans. |
Reports
|
|
Prepare the report on executive compensation required by the rules of the Securities and
Exchange Commission to be included in the Companys annual proxy statement. |
Meetings
In accordance with the applicable provisions of the Companys bylaws, as amended from time to time,
the Committee shall meet at such times and places, as the members deem advisable, and shall make
such recommendations to the Board as the Committee considers appropriate. When appropriate, the
Committee may meet in separate executive session with management, employees, general counsel,
internal audit and the independent auditor to discuss matters that the Committee or the other
groups believe warrant Committee attention. At each meeting of the Committee, an executive session
of only the Committee members shall be held.
Page 53
|
|
|
Name
|
|
Bank of Commerce Holdings |
Address 1
|
|
2011 Annual Meeting of Shareholders |
Address 2
|
|
Tuesday, May 1, 2011 at 5:15 p.m. |
City, State Zip
|
|
Lobby of Redding Bank of Commerce |
|
|
1951 Churn Creek Road |
|
|
Redding, California 96002 |
# of Shares: |
|
|
Important Notice regarding the availability of proxy materials for the Shareholder Meeting to be
held on May 17, 2011:
The Proxy statement and Annual Report on Form 10-K are available at Registrar and Transfer
www.rtco.com
ANNUAL MEETING PROXY CARD
This proxy when properly executed will be voted in the manner, directed by the undersigned
shareholder. If no direction is made, this proxy will be voted for all nominees listed under Item 1
and in favor of Item 2.
¨ Please mark this box with an X if you plan to attend the Annual
Shareholder Meeting
The Board of Directors recommends a vote FOR Items 1, and 2 below.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FOR |
|
WITHHOLD |
Orin N. Bennett
|
|
|
(01 |
) |
|
¨
|
|
¨ |
|
|
|
|
|
|
|
|
|
Gary Burks
|
|
|
(02 |
) |
|
¨
|
|
¨ |
|
|
|
|
|
|
|
|
|
Russell L. Duclos
|
|
|
(03 |
) |
|
¨
|
|
¨ |
|
|
|
|
|
|
|
|
|
Kenneth R. Gifford, Jr.
|
|
|
(04 |
) |
|
¨
|
|
¨ |
|
|
|
|
|
|
|
|
|
Jon Halfhide
|
|
|
(05 |
) |
|
¨
|
|
¨ |
|
|
|
|
|
|
|
|
|
Patrick J. Moty
|
|
|
(06 |
) |
|
¨
|
|
¨ |
|
|
|
|
|
|
|
|
|
David H. Scott
|
|
|
(07 |
) |
|
¨
|
|
¨ |
|
|
|
|
|
|
|
|
|
Lyle L. Tullis
|
|
|
(08 |
) |
|
¨
|
|
¨ |
|
|
|
|
|
|
|
|
|
Joseph Gibson
|
|
|
(09 |
) |
|
¨
|
|
¨ |
Page 1
Proposal 2
The Board of Directors recommends a vote FOR the ratification of the appointment of Moss Adams, LLP
as the Companys independent registered public accounting firm for 2010
|
|
|
|
|
FOR
|
|
AGAINST
|
|
ABSTAIN |
¨
|
|
¨
|
|
¨ |
Proposal 3
The Board of Directors recommends a vote FOR the adoption of the non-binding advisory resolution
approving the compensation of the named executive officers.
|
|
|
|
|
FOR
|
|
AGAINST
|
|
ABSTAIN |
¨
|
|
¨
|
|
¨ |
This proxy is solicited on behalf of the Board of Directors.
You, the undersigned stockholder, appoint each Kenneth R. Gifford, Jr. Chairman of the Board and
Patrick J. Moty, President and CEO your attorney and proxy, with full power of substitution, on
your behalf and with all powers you would possess if personally present, to vote all shares of Bank
of Commerce Holdings Common Stock that you would be entitled to vote at the Annual Meeting of
Shareholders to be held at 1951 Churn Creek Road, Redding, California on Tuesday, May 17, 2011 at
5:15 p.m.
The shares represented by this proxy will be voted as instructed by you and in the discretion of
the proxies on other matters. If not otherwise specified, shares will be voted in accordance with
the recommendations of the Board of Directors.
Date:_____________________________________________
Page 2
PROXY VOTING INSTRUCTIONS
Please sign on the reverse side and return promptly in the enclosed envelope or vote by
telephone.
TELEPHONE VOTING INSTRUCTIONS
TO VOTE
BY PHONE: Call toll-free
1-800-840-1208 on touch-tone telephone 24-hours a day 7 days
a week.
There is NO CHARGE to you for this call. Have your proxy card in hand.
You will be asked to enter a Control Number, which is located in the box in the lower right hand
corner of this form.
Option 1: To vote as the Board of Directors recommends on ALL proposals.
Proposal 1 To vote FOR ALL Nominees, Press 1; to WITHHOLD FOR ALL nominees, press 9, to WITHHOLD
FOR AN INDIVIDUAL nominee, press 0 and listen to the instructions.
When asked, please confirm by pressing 1.
The instructions are the same for all remaining proposals.
NOTE: If you vote by telephone or internet, THERE IS NO NEED TO MAIL BACK your Proxy Card.
Page 3